MMW-114 -- Reflections on Ringtones

J@pan Inc Magazine Presents:
Commentary on Japan's music technology news

Issue No. 114
Thursday, August 9, 2007



++ FEATURE: Reflections on Ringtones

** YouTube, Google execs meet with Japanese rights
organizations again
** MTV launches myMTV SNS for mobile
** Napster adds recommendation engine to mobile site
** Apple distributes iTunes cards at Super Sonic
** Konami releases 'Dance Dance Revolution Hottest Party'

++ FEATURE: Reflections on Ringtones

It seems like only yesterday that polyphonic ringtones were all
the rage in Japan, with mobile content companies frantically
hustling to create MIDI-like files for all the popular songs in
first 4-voice polyphony in 2000, followed by 16-poly in 2001 and
40-poly in 2002. Although many in the mobile industry thought the
ringtone market here had peaked by that time, it somehow managed
to keep growing for another three years. In fact, it has really
only been in the past seven months or so - since the beginning of
this year - that we're finally seeing the major shakeout here
that was expected several years ago.

This time, though, it's for real. All the restructurings,
reorganizations and layoffs happening this year among mobile
content providers have driven home the point that the party is
now officially over. Having spent the past seven years working in
the middle of this ringtone phenomenon, it almost feels like
we're coming out of a prolonged period of suspended reality and
back into the actual rough-and-tumble world of business. Still,
it's been a great ride, and I'm glad to have been on it, even if
the landing was a bit rough. Looking back now in retrospect on
this seven-year cycle for ringtones in Japan, there are a few
interesting points that stand out as worthy of mention.

For starters, polyphonic ringtones marked the first time that a
mass-market industry for selling music to consumers was developed
completely independent of major record labels. Suddenly,
companies such as Yamaha and Faith who had previously used their
know-how to sell to a niche market of music makers were now
leveraging that knowledge to reach a mass market of music
*consumers*. Both companies developed synthetic sound file
formats that are essentially variations on MIDI. Because nothing
is taken from the original master recordings, no royalties were
owed to the record labels (despite their vociferous protests to
the contrary).

Secondly, polyphonic ringtones put the power of production into
the hands of real musicians and music creators, who were paid to
create their own renditions of popular songs. The bulk of the
work in content production for poly ringtones lies in the
creation of the master MIDI file. This work requires a good ear
for music and a strong sense of arrangement. One of the great
things about the ringtone boom in Japan is that it opened up a
much bigger market for people with this kind of musical talent
and allowed them to earn some income from their skills of
arrangement and digital music creation.

Finally, polyphonic ringtones took full advantage of one of the
key benefits of MIDI-like formats: small file size. When
realtones (audio clips from the actual recordings) first came on
the market here, expectations were high that they would attain
the same level of popularity as polyphonic ringtones. This hasn't
happened, and one of the main reasons is that the file sizes for
realtones are often about fifteen times that of a similar
polyphonic ringtone. Since most people (even in Japan) are not
yet on flat-rate data plans, downloading just a few of these
files will make a big dent on your phone bill.

So, while the ringtone business was great while it lasted, even
the slowest of providers has known for a few years now that the
game is up and it's time to move on.

But move on to what?

This has been the burning question. After years of looking for
the Next Big Thing, the companies that made the most from
ringtones are starting to accept that there doesn't appear to be
anything of a comparable scale on the horizon. This realization
has resulted in the widespread reductions and sell-offs we're
seeing this year.

It will be interesting to see now if companies such as Yamaha
can successfully integrate their mobile content assets with their
print media businesses. Yamaha, for one, has already taken the
first steps in this process by merging the two businesses into a
subsidiary company, Yamaha Music Media (YMM). We've seen some
interesting possibilities recently for linking mobile 'extras'
to music books and magazines through the use of QR codes. While
the margins may not be nearly as attractive as they were with the
mass-market sale of ringtones, this type of print/mobile
integration does have the potential to give companies a leg up on
their competitors and strengthen their overall product offerings.


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** YouTube, Google execs meet with Japanese rights organizations
In brief: On July 31, executives from YouTube and Google,
met with representatives from 24 different rights
organizations and industry groups in Japan, including JASRAC
and RIAJ. The meeting was the second one this year, following a
February meeting in which the organizations lodged formal
complaints about copyright violations on YouTube. Although the
execs from YouTube and Google explained in detail the measures
they have taken so far to prevent illegal file sharing, the
Japanese organizations fired back that it was not nearly enough,
pointing out that other content sharing sites in Japan must take
responsibility for implementing specific prevention measures. The
organization reps said the same will be expected of YouTube going

** MTV launches myMTV SNS for mobile
In brief: On August 1, Viacom International Japan announced the
start of a new off-portal SNS service for mobile phones. The new
service is called myMTV and is free of charge to use. Handsets
from NTT DoCoMo, KDDI and SoftBank are all supported, but the
service is not accessible from PCs. It is structured much like
MySpace, with the same kind of artist pages, friend registration
and user profiles.

** Napster adds recommendation engine to mobile site
In brief: On July 24, Napster Japan added a recommendation
service to its mobile site currently running on NTT DoCoMo. The
new service is free to subscribers and works in much the same
way as the one on Napster Japan's PC site. Based on what the user
has downloaded before, the system recommends and displays the
title of ten new songs that are deemed to be similar.

** Apple distributes iTunes cards at Super Sonic
In brief: Apple will be handing out free download cards for ten
specific songs from artists appearing at the Super Sonic festival
on August 11 and 12. The card allows the user to download one
song each from Ben Westbeech, Bonde Do Role, CSS, Curly Giraffe,
Enter Shikari, Locksley, Madina Lake, Maximo Park, OCEANLANE,
and Unkle. The free song for each artist is fixed in advance, and
the card can't be used to download other songs by the artist.

** Konami releases 'Dance Dance Revolution Hottest Party'
In brief: Konami recently announced it is developing a new
version of its popular Dance Dance Revolution game for the
Nintendo Wii. The new edition is called 'Dance Dance Revolution
Hottest Party', and will combine the dance mat used in previous
versions with the Nintendo Wii controller. The game will be
released first in Japan, though a specific release date has not
been set yet.