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Ringtones started the mobile content market by demonstrating a demand for customization, initially amongst teens but then extending into the mass market. The first generation of ringtones were monophonic instrumental renditions of popular and sometimes original tunes. Users could pay to download ringtones to their mobile phones, optionally attaching them to incoming calls from select individuals in their address books. Second generation polyphonic ringtones first became popular in 2002 and encoded sequences of MIDI commands that provided higher fidelity, but these too are purely instrumental. In 2004 ringtones represented a $4 billion global market, almost all of it outside the United States of America.
Realtones have quickly replaced polyphonic ringtones and have taken over the ringtone market. In the second quarter of 2006, realtones accounted for more than 76 percent of mobile consumer spending on music personalization. Although realtones are technically mobile music, their popularity is driven mainly by the need for self-expression rather than standard enjoyment.
Ringtones have also had a dramatic effect on the mobile content value chain. Monophonic and polyphonic ringtones had to be published for each of the phone models, which led to the growth of various successful businesses for companies such as InfoSpace and Jamba!, who would both publish the tones and interact with carriers for their distribution and billing. Other international mobile content providers competed with them by providing truetones for free. As the market shifted to truetones and the formats standardized to Internet-standard formats, the added value of such third parties has diminished, and labels have chosen to publish their own songs and interact directly with the mobile carriers for billing and distribution, thereby cutting out these middlemen.
Truetones represent a high-growth revenue stream for the music business, and labels often release the tones before the singles to "prime" the market. Madonna released her song "Hung Up" as a truetone before releasing the single. Truetones often outsell singles.
- Realtones Account for More Than 76 Percent of Mobile Consumer Spending on Music Personalization, According to Telephia, August 7, 2006. Retrieved 8 May 2008.
- Edna Gundersen, "Mastertones ring up profits", USA Today, 28 November 2006. Retrieved 8 May 2008.