It’s been a while since my last post, but attending two conferences (one in Barcelona), moving to San Francisco, and starting a new company chewed up a lot of time.
I couldn’t resist posting about this article in the Washington Post, an overview of the ringtone industry. For all the excitement around full-track downloads, mobile TV, 3D games and the rest, ringtones still account for roughly 70% of mobile content revenues. Yet the companies that dominated the business just a few years ago are all suffering, because the music labels are doing direct deals with mobile operators and cutting them out. I’ve written about Infospace’s problems before.
This paragraph about my first company Vindigo jumped out:
Some, like Dwango, went out of business. Others reinvented
themselves as technology and service providers. Zingy, for
instance, merged in 2005 with Vindigo, which offers mobile
information services like MapQuest and The New York Times.
Personalization services like ringtones, video and wallpaper
images now make up less than 50 percent of the company’s
revenue.
I knew that ringtone revenue had declined while revenue from Vindigo’s products had continued to climb, but this is a surprise.
The writer missed what I believe to be the most successful ringtone vendor in the US today: Thumbplay. Thumbplay markets ringtones directly to consumers rather than through the carriers and has built an independent distribution channel that the music labels value. More mobile companies should be following this strategy.
Full disclosure: Thumbplay, like Vindigo (and Ztango, also mentioned in the article), is backed by iHatch Ventures, where I am entrepreneur-in-residence.