This was also the time where music had the highest value.
Consider revenue per song:
- £0 per downloaded song via torrent
- £0.003 per streaming song
- £0.70 - £1 per album song on CD
- £0.99 per song on iTunes
- £0.99 per single song on CD
- £1 per single song on 7"
- £1 per 10 seconds of song in a simplified midi track... equivalent to a per song value far higher
Lesson here if no-one saw it, the more you control the means of distribution and playback, the higher the price you can extract from the listener.
Long-term, when the final vestiges of openly available music vanish (CDs gone, streamed content heavily DRM'd), prices will definitely rise, or at least... those who most control the critical parts of distribution or playback at that time will be able extract the most revenue from the total revenue that exists. I believe that the pressure will be on the labels and artists at this time, and that even with technology helping to reduce the cost of recording and releasing music it's going to be hard on them. The winners are most likely the distributors of music across all platforms - Spotify look like a good bet.
This is the subject of a piece of work I did for the independent music labels in the UK in early 2000s and it's still relevant.
> "Long-term, when the final vestiges of openly available music vanish (CDs gone, streamed content heavily DRM'd)"
Thankfully the options to simply buy and download music in DRM-free formats are better than ever. So I don't think that prophecy will come true.
No matter how locked down mainstream music gets, there will always be artists who will stand up for open, easy and in some cases free access to their music.
Long-term, the only valuable resource is attention. Content is accumulating, faster and faster due to automation, thus its value is declining.
Artists can make money with concerts so they will pay you to become part of your life. Even now, youtube is already playing entire songs as advertisement. Why should it stop there?
If you consistently churn out good content, you will have people's attention, and that attention is monetizable. It has never been easier to go from nobody in the middle of nowhere to somebody known everywhere. There isn't one big category of losers so much as pockets of people who don't adapt well to the platform economy.
I do, however, think that we should reduce monopolistic behavior by platforms to enhance gains to content producers and consumers. I also think that the government should provide a better safety net, so that content producers don't have to lose several years of their life to a miserable, existential slog with the hope of stardom. It might still be a slog, but it doesn't have to be so miserable (no government health insurance is a big factor in America).
Ringtones barely made a blip amidst the rapidly declining CD revenue. CD revenue started to decline after Napster was released in 1999 and the music industry never fully recovered. Good chart here:
Napster was a godsend. The music industry was a racket. In 1999 it would cost me around $32 for a single CD album here in Australia. That's close to $55 dollars today adjusted for inflation. When music/movies/games first moved to online distribution they had artificially inflated prices here. The cost of these would often be 40-80% than what Americans would pay. This was due to their distribution deals that companies had to artificially drive up prices here. When the Australian dollar rose against the US dollar they changed out prices to Australian dollars, since for the first time we were paying the same as the Americans. Overnight these things rose in price 50%.
I pay for my music. I have had a Spotify subscription for years. They're offering me a product at a reasonable price. You try to extort people and they'll move back to piracy.
I got my first cd for christmas 1994 as a kid and I was kind of in the middle of adoption. Middle-class family in Germany. Some friends of mine already had CD players, but not all.
MCs were still everywhere, but I can't really comment on how much people actually spent.
I simply can't believe that the 1990-92 numbers are true in an adoption sense, or maybe the revenue was just a lot better than for MCs, because I honestly don't know anyone who had a meaningful CD collection in 1990 already. And this is not because I was too young (see above, first CD in 94) but even my friends' parents didn't have CDs from the 80s, later in the 90s.
But even aside from Napster and CD-Rs and iPods, the seeds of a downturn were planted in the 1980s.
There had been generations of format replacements-- cylinders to 78 to 45 to 33, reel-to-reel to weird cartridges and 8-track, then onward to compact cassette, but the CD ended up being the last meaningful physical audio format.
It's durable enough that people aren't having to re-buy their favourites after they unspool in the player, or the groove was reamed out by a heavy tonearm. It's high-fidelity enough that a replacement format won't make a sonic difference on most consumer grade equipment. It's convenient enough that people didn't need to buy another format as a compromise for portable play.
This meant all past business models for music consumption were going to fail as CDs reached saturation. You're not going to be selling a lot of classic albums anymore. The only way to go forward would have been an endless supply of new content, but then we get to the matter of attention and shelf space being finite.
Sure, Napster may have been pulled the trigger, but it shot an uindustry that was already on the verge of a massive coronary.
Napster and the like hurt the music industry but didn't land the killing blow to CDs. The murder weapon was the cheap DVD player.
In the mid-nineties, my cool friends with money had huge collections of CDs and listened to a lot of music. It was not uncommon to see shelves with scores of CDs proudly displayed in the living room next to an expensive stereo system.
By the early 2000s that was gone, replaced by a DVD player, the largest TV they could afford, and a stack of DVDs. Maybe a game console or two as well. All the disposable income that a decade earlier was being poured into music was now going toward the film and gaming industries.
Sure there was plenty of piracy but I would argue not enough to explain the drop.
This article misses existing revenue streams for "Ring&Sing" where you pay for your calling party to hear the song of your choice instad of a ringing sound until you pickup. These subscriptions are huge earners in big markets like India some claim it makes up for lost sms revenues.
But I also spent many hours on GoldWave 4.x mixing my own mp3 ringtones for years and still enjoy picking out a good riff when I hear it. I have a nice section of Eric Clapton's Layla looped as well as some Chilli Peppers, the Doors intro to Love me 2 Times, the sax on Born to Run + Quite a few more.
> Lesson here if no-one saw it, the more you control the means of distribution and playback, the higher the price you can extract from the listener.
For a snapshot, a brief moment in time, sure. But notice what the article points out- this business is gone, gone, gone. It is possible to think on longer timeframes than one transaction, one offering.
Lesson here if parent missed it, provide actual value if you want to exist for longer than a moment.
Someone once told me he made $60 an hour doing the easiest job of his life. I asked what it was, and he told me someone paid him one dollar to watch their seat for one minute. Not a bad rate- not a sustainable one either.
Do you remember ring BACK tones? In some countries you could choose what your ring sounded like on someone else's phone. So I could force your phone to play the latest Britney Spears track or whatever. Complete violation of personal space.
There’s another option: the Internet killed closed stores/portals (like Vodafone Live, which I worked in/with/for).
As phones became more sophisticated, it was easier for teens to snip audio from anywhere, convert it to whatever their phone used, and bypass ringtone stores altogether. _Very few_ adults customized their ringtones, and usually stuck to what shipped with the phone (or got their nephews to install a specific one they cared).
I also blame the Marimba ringtone on the iPhone — it became a sort of status symbol to let other people know you had an iPhone.
Plus there were dozens of utilities to take MIDI files and whatnot and turn them into semi-proprietary formats even before the iPhone came about.
But there is a large chunk of truth in the fact that people simply outgrew ringtones altogether, although these days video calling apps (Whatsapp/Teams/FaceTime) all have distinctive tones.
I wonder if subscription abuse also killed the market? So many scams where people were charged huge Premium SMS fees to get a new, crappy ringtone every week.
Oh, and the preferred capitalisation was "Vodafone live!" gotta have exclamation mark , or the brand police will get you ;-)
I always considered custom ringtone stores a gross abuse of the customer. MIDI existed YEARS earlier, so did MP3 and MOD. There's absolutely no reason why I shouldn't have been able to load my own on the phone and just play it. Some phones had this, most didn't.
My Ericsson "candybar" phone had a built in program you could compose ringtones on, so I spent an hour typing in Teenage Dirtbag from sheet music, the UI was painful. If I'd been wealthier I would understand buying a ringtone. But when phones could do mp3 ...
AxelF's Crazy Frog, from 2005, was peak ringtone in the UK to my recollection.
iPhones still don’t. You’re not allowed to make your own based on music-files or samples you have. Instead you have to buy custom ringtones in the iStore, if whatever you had considered to use is even available to buy (most often it is not).
It’s just amazingly stupid, and in 2020 there’s literally no excuse for such a software shortcoming.
This is incorrect. It is fairly trivial to create a ringtone of up to thirty seconds from any track you have in iTunes and push it to your phone. I do this frequently and it took me less than ten seconds to find instructions for how to do so via google.
> The phone turned out to be an abject user experience failure. It had a 100 song limit regardless of how much space you actually had left, and it was painfully slow at uploading songs from iTunes. Crucially, you couldn’t use it to buy ringtones or music remotely
I'm fairly sure that was a carrier-imposed limitation.
However much Apple's store looks like a monopoly now, we should also recognise that Apple did a lot to fight the awfulness of anti-features imposed by carriers on phones so they could sell the feature back to you at monopoly prices.
And the Apple 30% cut looks reasonable compared to a traditional music industry 70% cut ..
I think the "carrier restrictions" of stuff mostly were a thing in the US? In Norway I bought most of my phones even back then outright. And if one didn't, the effect was mostly that the phone was locked to only accept sim cards from the same operator. Didn't have much impact on features of the phone itself.
Another point is that very little about pre-iphone phones was customizable. I can't even remember downloading any apps before the iPhone. Custom ring-tones were therefore one of the few outlets for making your device your own.
As a sibling commenter I'm also from Norway. Here all magazines always had at least one full page with things one could buy for your phone. Ringtones, backgrounds, java games, util apps etc. On my old Sony Ericsson I even had a GBA emulator and used to play Pokemon, I used Opera Mini to cheaply browse wap/gprs etc.
I didn't feel the jump to a "smart phone" was particularly big at the time, actually.
I had a lot of fun writing J2ME apps on my old mobile phone back then. If I recall, it also used a special version of the JVM (https://en.wikipedia.org/wiki/K_virtual_machine) known as the KVM.
I am speaking from experience as a consumer.., that the app market was very ‘thin’... difficult to navigate, hard to locate and lacking in variety. But I also have talked at length. With someone who developed apps for phones pre-iPhone. His was a horror story.
As I recall (details fuzzy), He had to pay a substantial fee to the carriers in order for his app to be quality reviewed. If it failed, then he would gave to pay again. For each phone they supported, an extra fee was required. Also extra fees for different carriers, even if it was for a device already approved by another carrier.
Simply... in the days when the carriers ruled the waves, there was no profit in a healthy app dev community. In the UK, my first experience of a healthy app eco-system came with the dawn of the Palm Pilot.
A lot of pre-iPhone phones had a micro version of Java on them, and you could download via WAP stores, or even over the data cable, little apps and games. The SonyEricsson range of phones had full theming ability allowing you to customise the look and feel of the GUI completely.
Oh man, I did this with my Motorola Razr. I downloaded some version of Civilization. It was awful. The WAP stores were like 1990s web pages - all text, improperly formatted due to the small screen, confusing to navigate. The game itself was almost unusable. The "docs" were a single page text file of instructions poorly translated from Polish to English. I think I also had some version of Prince of Persia. Playing them both was not fun in any way. So yeah, they technically existed, and were basically useless.
> I can't even remember downloading any apps before the iPhone.
I'm pretty sure I've downloaded a bunch of games on my Sony Ericsson K700/750i/800. I believe they were just Java (jar) files that you download from some semi-shady-looking website that usually used a .mobi domain via a very expensive mobile data connection.
Granted, that's just a couple of years before the original iPhone, but I believe that the first iPhone that came with the App Store was 3G.
In the US I remember there was some variation between carriers on how locked down the devices were–my Motorola SLVR on Cingular circa 2005 ran the standard Motorola system and I had a bunch of Java games on it and could browse WAP sites for more. I was also able to install wallpapers and any MP3 clip from my computer as a ringtone. My friends who had RAZRs on Verizon, however, had some kind of crippled Verizon OS that forced you to use their store and were less customizable. They did have T9 predictive text, though, which I was jealous of.
Honestly I hardly hear ring tones at all even more. Getting different styles of vibrations for different notifications is much better. More discrete, faster to determine the notification before you look at your phone, less jarring...I don't mind at all.
I did buy a ring tone one from the apple store or itunes, whatever it was. Immediately thought it was a waste of a dollar.
I've taken to just using the default ringtones available with whatever phone I buy. I set a few important contacts to have distinctive ring/message tones, and then forget about it. Five minutes of set-up, years of never caring about it again.
I used a novelty ringtone until I realized it was conditioning me to dislike the song it was based off of. It was also slightly embarrassing to have a novel ringtone when no one else had one.
I now realize the best ringtone is one that is nondescript and has no other associations.
It certainly drove the development and adoption of "micropayments" at the time.
There was also confusion around copyright issues, with some characters seemingly thinking that "under 30 seconds" of copyrighted music was fair-game.
I also remember when you could make custom iPhone ringtones in Garageband and easily transfer via iTunes, though that feature seems to have vanished(?).
Readit News
Consider revenue per song:
- £0 per downloaded song via torrent
- £0.003 per streaming song
- £0.70 - £1 per album song on CD
- £0.99 per song on iTunes
- £0.99 per single song on CD
- £1 per single song on 7"
- £1 per 10 seconds of song in a simplified midi track... equivalent to a per song value far higher
Lesson here if no-one saw it, the more you control the means of distribution and playback, the higher the price you can extract from the listener.
Long-term, when the final vestiges of openly available music vanish (CDs gone, streamed content heavily DRM'd), prices will definitely rise, or at least... those who most control the critical parts of distribution or playback at that time will be able extract the most revenue from the total revenue that exists. I believe that the pressure will be on the labels and artists at this time, and that even with technology helping to reduce the cost of recording and releasing music it's going to be hard on them. The winners are most likely the distributors of music across all platforms - Spotify look like a good bet.
This is the subject of a piece of work I did for the independent music labels in the UK in early 2000s and it's still relevant.
One minute of incredibly low quality audio from popular songs stored in a physical cartridge, with a dedicated player.
The 90s had some wild ideas for music monetization.
Thankfully the options to simply buy and download music in DRM-free formats are better than ever. So I don't think that prophecy will come true.
No matter how locked down mainstream music gets, there will always be artists who will stand up for open, easy and in some cases free access to their music.
Even if that weren't the case, the final choice is "don't buy that song".
There is always competition, and that will always keep a lid of prices to an extent.
Artists can make money with concerts so they will pay you to become part of your life. Even now, youtube is already playing entire songs as advertisement. Why should it stop there?
I do, however, think that we should reduce monopolistic behavior by platforms to enhance gains to content producers and consumers. I also think that the government should provide a better safety net, so that content producers don't have to lose several years of their life to a miserable, existential slog with the hope of stardom. It might still be a slog, but it doesn't have to be so miserable (no government health insurance is a big factor in America).
The only answer is less engagement.
https://www.visualcapitalist.com/music-industry-sales/
I pay for my music. I have had a Spotify subscription for years. They're offering me a product at a reasonable price. You try to extort people and they'll move back to piracy.
I got my first cd for christmas 1994 as a kid and I was kind of in the middle of adoption. Middle-class family in Germany. Some friends of mine already had CD players, but not all.
MCs were still everywhere, but I can't really comment on how much people actually spent.
I simply can't believe that the 1990-92 numbers are true in an adoption sense, or maybe the revenue was just a lot better than for MCs, because I honestly don't know anyone who had a meaningful CD collection in 1990 already. And this is not because I was too young (see above, first CD in 94) but even my friends' parents didn't have CDs from the 80s, later in the 90s.
There had been generations of format replacements-- cylinders to 78 to 45 to 33, reel-to-reel to weird cartridges and 8-track, then onward to compact cassette, but the CD ended up being the last meaningful physical audio format.
It's durable enough that people aren't having to re-buy their favourites after they unspool in the player, or the groove was reamed out by a heavy tonearm. It's high-fidelity enough that a replacement format won't make a sonic difference on most consumer grade equipment. It's convenient enough that people didn't need to buy another format as a compromise for portable play.
This meant all past business models for music consumption were going to fail as CDs reached saturation. You're not going to be selling a lot of classic albums anymore. The only way to go forward would have been an endless supply of new content, but then we get to the matter of attention and shelf space being finite.
Sure, Napster may have been pulled the trigger, but it shot an uindustry that was already on the verge of a massive coronary.
In the mid-nineties, my cool friends with money had huge collections of CDs and listened to a lot of music. It was not uncommon to see shelves with scores of CDs proudly displayed in the living room next to an expensive stereo system.
By the early 2000s that was gone, replaced by a DVD player, the largest TV they could afford, and a stack of DVDs. Maybe a game console or two as well. All the disposable income that a decade earlier was being poured into music was now going toward the film and gaming industries.
Sure there was plenty of piracy but I would argue not enough to explain the drop.
But I also spent many hours on GoldWave 4.x mixing my own mp3 ringtones for years and still enjoy picking out a good riff when I hear it. I have a nice section of Eric Clapton's Layla looped as well as some Chilli Peppers, the Doors intro to Love me 2 Times, the sax on Born to Run + Quite a few more.
For a snapshot, a brief moment in time, sure. But notice what the article points out- this business is gone, gone, gone. It is possible to think on longer timeframes than one transaction, one offering.
Lesson here if parent missed it, provide actual value if you want to exist for longer than a moment.
Someone once told me he made $60 an hour doing the easiest job of his life. I asked what it was, and he told me someone paid him one dollar to watch their seat for one minute. Not a bad rate- not a sustainable one either.
Dead Comment
As phones became more sophisticated, it was easier for teens to snip audio from anywhere, convert it to whatever their phone used, and bypass ringtone stores altogether. _Very few_ adults customized their ringtones, and usually stuck to what shipped with the phone (or got their nephews to install a specific one they cared).
I also blame the Marimba ringtone on the iPhone — it became a sort of status symbol to let other people know you had an iPhone.
Plus there were dozens of utilities to take MIDI files and whatnot and turn them into semi-proprietary formats even before the iPhone came about.
But there is a large chunk of truth in the fact that people simply outgrew ringtones altogether, although these days video calling apps (Whatsapp/Teams/FaceTime) all have distinctive tones.
Oh, and the preferred capitalisation was "Vodafone live!" gotta have exclamation mark , or the brand police will get you ;-)
I think this is the real reason why.
I hate the marimba ringtone for that reason too lol.
For years my ringtone was the sound of the TARDIS taking off.
AxelF's Crazy Frog, from 2005, was peak ringtone in the UK to my recollection.
It’s just amazingly stupid, and in 2020 there’s literally no excuse for such a software shortcoming.
> The phone turned out to be an abject user experience failure. It had a 100 song limit regardless of how much space you actually had left, and it was painfully slow at uploading songs from iTunes. Crucially, you couldn’t use it to buy ringtones or music remotely
I'm fairly sure that was a carrier-imposed limitation.
However much Apple's store looks like a monopoly now, we should also recognise that Apple did a lot to fight the awfulness of anti-features imposed by carriers on phones so they could sell the feature back to you at monopoly prices.
And the Apple 30% cut looks reasonable compared to a traditional music industry 70% cut ..
I didn't feel the jump to a "smart phone" was particularly big at the time, actually.
As I recall (details fuzzy), He had to pay a substantial fee to the carriers in order for his app to be quality reviewed. If it failed, then he would gave to pay again. For each phone they supported, an extra fee was required. Also extra fees for different carriers, even if it was for a device already approved by another carrier.
Simply... in the days when the carriers ruled the waves, there was no profit in a healthy app dev community. In the UK, my first experience of a healthy app eco-system came with the dawn of the Palm Pilot.
I'm pretty sure I've downloaded a bunch of games on my Sony Ericsson K700/750i/800. I believe they were just Java (jar) files that you download from some semi-shady-looking website that usually used a .mobi domain via a very expensive mobile data connection.
Granted, that's just a couple of years before the original iPhone, but I believe that the first iPhone that came with the App Store was 3G.
I did buy a ring tone one from the apple store or itunes, whatever it was. Immediately thought it was a waste of a dollar.
I now realize the best ringtone is one that is nondescript and has no other associations.
There was also confusion around copyright issues, with some characters seemingly thinking that "under 30 seconds" of copyrighted music was fair-game.
I also remember when you could make custom iPhone ringtones in Garageband and easily transfer via iTunes, though that feature seems to have vanished(?).