Biz potential of ringback tones still untapped

Next to SMS or text messaging, ring-back tones (RBT) has been touted as a lucrative revenue source for mobile operators. However, based on its uptake across the globe, it seems it has not lived up to its billing - yet. 

In a report entitled 'SUCCESS; Ringback Deployment and Adoption Best Practices', NMS Communications identified key barriers to subscriber uptake and the historical reasons for slow uptake of any content-based mobile service.

RBTs are one of the few mobile applications not constrained by network technologies or handset dependencies. In other words, every mobile subscriber is a potential customer - a prospective target market of more than two billion people. 

So, why aren't RBTs more visible‾ Where are all of the RBT subscribers‾

RBT penetration varies widely by region. In Asia RBTs have entered the mature phase of its lifecycle with most tier 1 and 2 carriers offering the service. In Eastern Europe, South America, the Middle East and Africa RBTs are in the growth stage with many tier 1 carriers beginning to launch the service. North America is also in the growth stage although much of that opportunity falls within tier 2 carriers and MVNOs. RBTs lifecycle stage in Western Europe lies between North America's and Asia's.

Subscriber adoption rates within these markets also vary widely. Some operators boast rates above 50% while their peers struggle with subscriber rates below 1%. Market timing could contribute to the vast discrepancy between overachievers and underperformers, but timing cannot be easily influenced.
However, through quantitative analysis and qualitative research, we have identified five key fundamentals that help operators to successfully deploy ring-back tone service.

Fully utilize product features

RBT is about self-expression and interactivity. The more subscribers can personalize the service, the more they interact with the system, increasing the likelihood they will purchase additional RBTs. Too often operators don't deploy the full feature set, instead choosing to keep the product 'simple'. While this approach may be effective initially, it limits customer choice and ultimately acts as a long-term deterrent to subscriber adoption and incremental content sales as subscribers become bored.

Operators must battle the 'set it and forget it' mindset customers succumb to once they define their preferences. How can this be accomplished‾ Operators should deploy a solution designed to prompt subscriber interaction that maximizes personalization options.

For example, an operator could offer a service that includes day of the week and time-of-day personalization options that would engage the subscriber to set-up multiple tones for different combinations, i.e., weekends vs. weekdays, mornings vs. nights, Monday morning vs. Friday night, etc.

Simplify pricing

Traditionally, subscribers purchase value-added services as part of a bundle or as a pay-per-event. RBT pricing does not follow these models, resulting in an adoption barrier. While varying by operator, RBT pricing generally consists of a subscription fee and/or content transaction charge - an unfamiliar approach to the average subscriber used to purchasing ringtones per download. In mature mobile markets, the subscription fee is usually $1 per month - the per-purchase content fee is normally about $2.


One innovative operator offered a subscription waiver model where the subscription fee is waived if the subscriber purchases one new RBT per month. This operator claims it sells approximately two million pieces of content per month.

Make it easy to find and use

Subscribers predominantly interact with the service via IVR, web, and WAP interfaces - with WAP being the most common and most challenging. For example, one operator reported a promotion that brought 60,000 subscribers to the WAP deck to purchase content or register for the service. Given difficulties with assigning purchased content in the WAP interface, 89% of the new subscribers abandoned the process before final purchase.

Even more troubling, a number of existing ring-back service subscribers cancelled their subscriptions during the same period, presumably because the promotion reminded them to go back and purchase more content, but they found the process too difficult.

IVR presents a challenge in terms of content catalog size. The operator with the most successful IVR-driven service - with 8% subscriber penetration in eight months - limits the IVR catalog to nine categories with nine songs available in each. The full catalog is available via WAP.

Discovery and usability are critical success factors to any mobile application. Because of the high degree of personalization that ring-back service allows, the purchase process should be integrated with the provisioning process.

Many operators unintentionally complicate the user experience by splitting the purchasing and provisioning processes. This forces the subscriber to perform two different actions, purchasing a RBT and then assigning it rather than performing both actions simultaneously.

Fresh content Content is king.

If operators want to increase adoption and content purchases while minimizing cancellations, a compelling content catalog is a must. However, offering a broad variety of music genres is only half the story. The frequency at which content is refreshed, new songs added and new categories added is equally important.

We recommend twice-monthly content uploads - subscribers will frequently return and purchase if they learn that new content is consistently available. Consider removing even popular content from the catalog - this conditions subscribers to buy content when they see it, as they never know if it will be available next time. Also alert subscribers to new content that could be of interest to them by employing regular alerting (opt-in or opt-out).

Marketing persistence

Too often, value-added services, like RBTs, are left to their own devices after the initial launch. With minimal support or budget, the application's yield slowly declines as the operator's attention shifts to the next 'hot' application. As a result, they never reach their potential.

To avoid this cycle of application cannibalization, successful operators combine the viral capability of RBT with core marketing principles like segmentation and direct marketing. For example, one operator designed pricing initiatives and marketing programs that specifically targeted existing users as well as current users of other music services. The campaign ran for three months and resulted in a 40% increase in subscriptions (with negligible churn since the campaign ended) and 50% increase in content purchase rates of current subscribers.


Few products offer the revenue opportunity presented in a prospective base of over two billion people, yet fully realizing that potential has proven elusive for some, but not all operators. What constitutes a successful ringback service‾ Unfortunately, there is no silver bullet but a single theme does emerge - commitment.Chris Bondhus is director of product marketing, mobile applications, at NMS Communications.