Ringtones: Performance Art?

The American Society of Composers, Authors and Publishers (ASCAP) filed suit against AT&T and Verizon, asserting that ringtones qualify as a public performance under the Copyright Act. ASCAP, which has 350,000 members, collects royalties and licenses public performances of works under copyright. http://www.pcworld.com/businesscenter/article/167761/when_your_phone_rings_the_copyright_police_may_come_calling.htmlThe The Electronic Frontier Foundation responded by arguing that copyright law exempts performances that are conducted without a commercial purpose, such as ringtones in a restaurant.

It is hard to believe that ASCAP legitimately likens a ringtone to a performance. More likely, the group is firing a legal warning shot to declare that it will fight for every last dollar to be made from mobile content. And there will be lots of dollars to fight for. KPMG and The Mobile Entertainment Forum project that the current market for mobile entertainment is $32B and will increase by 27% in 2010, despite the trying economic environment.

When audiences grow, advertisers follow. The mainstreaming of mobile entertainment means that more content will be ad supported, just like on traditional broadcast media. Juniper projects a $5.7 Billion mobile advertising market by 2014; in 2009, the figure is $760 Million. The tougher economy means less paid downloads and subscriptions and more openness to accepting ads for content. http://www.intomobile.com/2009/06/10/juniper-research-mobile-advertising-to-reach-57-billion-by-2014.html.

New York – based Atrinsic (Nasdaq:ATRN) provides digital content – music, gaming, contests, social – to consumers that agree to accept text ads. Its mobile ad network provides a superior ROI to advertisers because results are instant and measureable. An advertiser can see how many people received and acted on a marketing offer. Atrinsic can filter millions of consumer data by demographic, geography and interest area as well as their preference for how the ad should be delivered, i.e. in the form of promotions, store locations and special offers.

Mobile search is seen by many as the next big thing in mobile advertising. The Kelsey Group is predicting that U.S. local mobile search advertising will hit $1.3 billion by 2013, up from just $20 million in 2008. Today, about 20 percent of cell phone subscribers—some 54.4 million—are on the mobile Web, though only about a tenth of those are doing mobile searches. http://www.appscout.com/2009/02/study_local_mobile_search_mark_1.php  Irvine, CA-based Local.com (Nasdaq:LOCM), is well-positioned to grow its business in mobile search because it is the leader in providing ad sponsored local directories. It operates just like the yellow pages, with 700 local properties reaching 20 million active searchers a month.

The hype of mobile search is that is can utilize advances in GPS and digital mapping to send you ads for the stores nearby. The idea was seemingly always a year or two away. Enter the iPhone. The 3G Iphone’s recent adoption of a Location Based Services (LBS) technology provides a mass audience and unlimited source of application developers to find innovative ways to use the technology. http://gigaom.com/2009/04/27/iphone-is-boosting-demand-for-location-based-services/

The first activity in which LBS is first expected to thrive? What else…. social networking. Atrinsic claims that social networking will be the hottest growth sector in mobile content for the next five years.

Openwave Systems (Nasdaq:OPWV) has recently launched its own LBS app called Location Express for mobile operators in emerging countries. Basic location services such as business look-up nearest a subscriber can be sent via SMS text message to prepaid mobile phone users. The Company has a long foothold in developing mobile and broadband software and has a global presence. There is little reason to suspect it will limit its outreach to developing areas.

Want further proof that the market for mobile content moves quickly? Privately held FusionOne of San Jose has staked out territory in what could be a profitable niche – transferring content from one phone to another. Seems only 13% of consumers transfer content from their old mobile phone to their new one, so it seems like a solid niche to stake.


One thought on “Ringtones: Performance Art?

  1. Pingback: ringtones for iphone

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