Now That The Ringtone Market Is Collapsing, Are There Lessons For Those Who Are Jumping On The App Bandwagon?

from the this-won't-save-your-business dept

Back in 2003/2004, both the music and the mobile industries became infatuated with ringtones. These short snippets of music were selling for 2.5 times (or more) what a single (full) music file was selling for, and the market was growing rapidly. Of course, some of this was due to incredibly shady practices, such as tricking people into thinking they were buying a single ringtone, when they were really signing up for a monthly subscription. However, from the very beginning of the ringtone revolution, we were amazed at how many folks in the industry talked about ringtones as a savior. As we pointed out in 2004, it wasn’t hard to predict that ringtone sales would peak and fall. First of all, it would become increasingly easy to take music that people had from elsewhere (authorized or not) and convert it to a ringtone, and secondly, it wouldn’t be all that long until unauthorized ringtones became easy to set up as well.

But the industry has a way of overhyping a fad that’s happening “now,” and betting it will be its savior.

And, of course, exactly what was predicted way back when is now coming true. The ringtone market has been on the decline for a few years now, as people realized they didn’t need to pay exorbitant prices for a tiny snippet of music anymore.

This is why we should think carefully whenever we hear people claiming that “app stores” are the new saviors of various content industries (or, for that matter, the mobile industry). While app stores are a bit more defensible than pure ringtones, it’s likely to still face the same basic trajectory, as people realize that apps are just data, and there are increasing opportunities for more open solutions to route around locked-down versions. People seem to think there’s some sort of magic in “apps,” but they’re really just the same sort of digital content that has been hard, economically, to monetize long term. There are ways to do it, but simply assuming that apps alone will be the answer is likely to end in disappointment.

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Comments on “Now That The Ringtone Market Is Collapsing, Are There Lessons For Those Who Are Jumping On The App Bandwagon?”

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32 Comments
Anonymous Coward says:

Re: Apps are dead...

Just saying something doesn’t make it so. Apps have limitations, as do HTML5 sites. Neither is going to “kill” the other.

Philosophically, I’m rooting for HTML5, if only because I never want to be tied down to any single hardware or software provider ever again. I don’t care if it’s apple or google, fuck ’em all. Yeah I’m a blast at parties.

Financially, I’m rooting for apps, since that is where my particular source of revenue comes from, supporting the silly immature insecure platforms that produce them.

Anonymous Coward says:

Re: Re: Re: Apps are dead...

The massive popularity of RiM, iOS, Symbian, beg to differ. These are not platforms with focus on HTML5 or with users that seem to care about it. Even the Droid doesn’t particularly work well with HTML5, given the fragmented OS situation and a browser that is fairly slow on most platforms compared to apps. If you know of a killer HTML5 app that all these platforms are using, please let me know.

In fact, most mobile websites DUMB DOWN their presentation, they don’t use HTML5 features at all.

nasch (profile) says:

Re: Re: Re:4 Apps are dead...

I don’t think it’s been the same thing. There aren’t many desktop apps that are more or less repackaged web pages, which is what a lot of people are talking about as the savior of content companies. They’re not talking about apps that do something useful and unique, they’re talking about apps that deliver content to a device. As far as that goes, the web has pretty much dominated that role on desktops for quite some time.

Danny says:

They brought it on themselves...

Instead of the outrageous pricing for ringtones they could have been done in a very simple manner that would have least had some staying power.

The reason the ringtone market is falling (or has fallen) is because they were overpriced and in many cases your only choice was the 30sec. clip that they offered you. So you’re paying a few dollars for a clip of a song and you didn’t even get to choose whas 30sec to use. (I make my own ringtones and one thing I hate is to hear a ringtone on a cell phone that has a sudden stop right in the middle of a beat or verse.)

All those folks had to do was simply come up with a way that would allow people shopping for ringtones to edit the song themselves (but put some sort of limit like say their clip can’t be longer than 30sec.) and the pay a reasonable price. And by reasonable I mean does it make sense to charge $2 for a clip of a song that only costs $.99 in the first place? It doesn’t cost $1.01 to edit a digital copy of a song.

I think that if people take the same attitude with apps as ringtones they are doomed to fail. If an app is only doing something that you can already do yourself then why download (and possibly pay for) a small program to do it for you? If an app is doing something you can’t do on your own but charges an unreasonable price that will just lead people to figure out how to do it themselves or go without that something.

Same thing with these news sites that are trying to put up paywalls. They will find out in the long run that you just can’t put a price tag on something people can get elsewhere and expect the money to come rolling in.

Ima Fish (profile) says:

While I agree that apps will not save any outdated industry, I think apps are a different market than ringtones and are not analogous.

Ringtones were a pure fad. It was guys setting up Elton John’s the Bitch is Back as a ringtone when his wife called. That may have been funny the first time, but it got boring real fast. I knew it wouldn’t last and I didn’t even know how expensive they were.

Chronno S. Trigger (profile) says:

Re: Re:

Selling custom ringtones went away due to phones being MP3 players and allowing MP3s to be ringtones, and the ease of creating ones own ringtone and uploading it to a phone. Give me an MP3, Audacity, and ten minutes (I’m really picky about my timing) and I’ll give you a ringtone.

Apps will be going away due to other reasons. As easy as it is getting to make exclusively server side programs, it’s only a matter of time before all the small, silly programs are all server side. Microsoft has an online version of office, Google has Google Docs. E-Mail is almost exclusively online, except business mail, but that’ heading that way as well.

It’ll take longer for larger programs to become all server side, but we already see the start of it. Streaming videos threw netflix, streaming games threw a company I can’t remember the name to. I’ve even seen someone create a World of Warcraft client that ran exclusively in the iPod touch browser (it sucked, but it did work).

Honestly, I’m afraid of the day that everything is in the cloud. I know too much about how technology works to trust someone else with exclusive copies of my data. But, I must accept it when it does come.

Anonymous Coward says:

Re: Re:

Huh? People are still using ringtones. They haven’t gone away, the ridiculous, overpriced industry is dying.

I get all mine from a free site that’s probably in Russia. It has an editor if you wish to upload, cut your own and share. I don’t usually take the time to do my own since it typically has what ever I’m looking for and only takes a few seconds to grab what I’m looking for.

Dark Helmet (profile) says:

Re: Overvalued content

“Unfortunately, most content providers have about as much self control and common sense as a 3 year old with a bag of candy.”

You’re not wrong, but let’s be fair: it is REALLY difficult as a creator not to overPRICE your own work because of the value you yourself place on it. When I released my Kickstarter project this week, one of things I had to do was choose my funding goal. Every cell in my body screamed, “A billion dollars! A hundred billion! That’s what this story is worth. A gazillion billion kajillion dollars!”

I ended up at $5000. Still, I don’t know how realistic that is. It’s part of the fun of experimenting with Kickstarter (in that there’s no permanent loss if the project doesn’t go as planned), but it’s a mental equation that is very difficult for narcissistic creators have to deal with….

Pangolin (profile) says:

Short sighted

I don’t generally disagree with TechDirt positions but in this case I think you missed the boat.

Ap STORES (and the key word here is STORE) are great for developers the same way that supermarkets are great for eggs. CUSTOMERS have a centralized place to obtain goods – and don’t have to go to Farm A to get eggs, Farm B to get Milk and Farm C to get meat.

Sure – a saavy shopper can go directly to the farm and save some money but the STORE is CONVENIENT. In that Ap Stores rule.

xs (profile) says:

Key difference between ringtone and App

Almost everyone with some basic computer knowledge and downloaded tools can create and install ringtones on their phones. However, comparatively much fewer people have the both the skills and time to create an app for their phone. Not to mention upgraded phone can still use old ringtone, but an OS upgrade could potentially break your app, thus requiring continuous upgrade and support from original author. So the app market will be a much more permanent feature in mobile phone world than ringtone was.

TtfnJohn (profile) says:

Re: Key difference between ringtone and App

For all the nit picking between apps and ring tones there’s one basic fact that Techdirt has right. Neither are saviors of content companies, Wired’s dreams of world domination to the contrary.

I’m already drowning in a world where every third web site has a Facebook app, a Twitter app, a Flickr app and the God’s of computers know how many other apps small and large. Mostly just simple repackaging of RSS and calling it an app.

The funny thing is that while smart phones have lots of good features the app promoters keep forgetting that the damned things are still phones not fully powered desktops or even lightly powered netbooks. Both of those examples an order of magnitude more powerful than a phone with a crappy speaker or two or an equally crappy set of ear buds or headsets.

As the article says sooner, rather than later, open standards will appear that allow people to use the same app on any computing platform, anywhere, removing the smart phone, desktop, netbook tether completely and there goes the walled garden and dreams of getting rich on the next-big-thing in apps.

And at some point all apps need Internet connectivity, promoters to the contrary. Not necessarily Web connectivity but the Web and the Internet are not two different things.

For an app to be truly useful it needs to compatible any time, anywhere, on any of the major platforms mobile or not. Until then they’re toys.

And one other thing about ring tones seems to be that people just got tired of them and went back to some kind of standard ring if what I’m hearing around me is any indication. A lot (most) of the apps will suffer the same fate.

john says:

The article’s right that apps that are just repackaged web content are dumb. But there are some anti-app sentiments I’ve seen in this thread and elsewhere that don’t convince me.

(1) HTML apps that are just designed to be locally stored aren’t necessarily “web” apps–the flip clock that I have on my iPhone is pure HTML5, but there’s nothing webby about it. It’s just a program. HTML5 is often just a way to make cross-platform apps, but they’re still apps. Writing something in an open standard and with technologies originally designed for the web doesn’t make it no longer an app. By that logic, OS X Dashboard widgets are just “the web.”

(2) There are plenty of things that can be done with native code that can’t be done on a cross-platform HTML5 app, and can’t be done server-side or on the web at all. There are lots of actual apps, utilities, and games on my phone that do things in Cocoa that couldn’t be done another way. Put it another way: phone apps will go away when desktop apps do.

trrll (profile) says:

It has been hard to monetize app-like programs in the past because the lack of a good distribution and payment system led people to ask outrageous prices. An app doesn’t have to do very much to be worth a buck or two to me. That’s about the value of the time it would take me to search something out on the web if I didn’t have the convenience of one-stop shopping via the App Store. And when I’m only paying a buck or two, I don’t really much care about whether I could run the same app on a phone that I don’t have.

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