Ringtone Business Forecasted To Be Just A Bit More Robust Than CD Business

We’re on record as far as being skeptical about the idea that mobile music, particularly in the form of overpriced ringtones, is going to save the music business, and today’s report from the performing-rights organization BMI forecasts a drop in the ringtone market:

BMI estimates that the 2007 music ringtone market will dip to $550 million (U.S.) in retail sales, down $50 million (U.S.) from calendar year 2006. BMI pegged the market at $600 million (U.S.) in calendar year 2006; $500 million (U.S.) in 2005; $245 million (U.S.) in 2004 and $68 million (U.S.) in 2003, respectively.

But don’t worry, music business! There’s good news ahead–well, sort of.

BMI projects that ringbacks will generate approximately $65 million (U.S.) in retail content revenues in 2007. This is BMI’s first market estimate of the long-awaited rollout of the ringback tone market. A ringback tone is a musical work that is performed to the caller when they place a call to a participating mobile subscriber.

BMI’s estimates are based on more than 520 million individual, detailed ringtone transactions analyzed by the organization over the past 12 consecutive quarters. BMI tracks census sales data on more than 325 outlets for the sale of mobile entertainment in the U.S.

“As we forecasted last year, the ringtone market matured in 2006. The slowdown in ringtone growth, however, was partially offset by the first wave of promising U.S. growth in ringback tones,” said BMI Vice President of New Media and Strategic Development, Richard Conlon. “We believe that the ringtone market’s growth has leveled off and the novelty phase has ended. We envision increased revenue opportunity in the streaming sectors of the mobile entertainment market, ranging from ringtones to audiovisual cellular phone TV-style offerings.”

Expect another announcement like this in a year (or earlier–we don’t really know many people who partake in the ringback market, and we were buying ringtones back in the monophonic days), still touting the tantalizing possibility of “TV-style offerings” on cell phones, although we don’t really see those working out too well until someone decides to package a remote control as a way to help users avoid having to scroll through nine menus to get to the one program they want.

BMI Forecasts Ringtone Market Down 8% in 2007 [MarketWire]