A ring-back tone is the sound or music that callers can hear instead of a ringing tone when calling a mobile phone. Consumers are charged two fees for ring-back tones: a subscription fee of about RMB5 (US$0.67) and a title fee of RMB2-3 (US$0.27-0.40) per song.
In the past, operators would only receive 15% of the title fee, the other 85% going to the service provider and content provider. Now operators are cutting out the service providers to take a larger share of the profits. According to Beijing-based consultancy BDA China, China Mobile’s ring-back tone sales jumped 97% in 2006 to US$900.3 million and were on course to post a 90% gain in 2007.
Central Music Platform
China Mobile launched the Central Music Platform this year to bring together the 150-plus mobile music platforms currently operating in the country. It allows firms to work directly with record labels to sell music-based products.
“China Mobile has allowed only a handful of [WVAS] service providers to join the platform,” said Mark Natkin, Managing Director of Beijing-based Marbridge Consulting.
The reason it allowed the service providers in at all was to tap their experience in marketing ring-back tones. However, instead of splitting proceeds with service providers, China Mobile has simply made direct licensing deals with major foreign and domestic music labels.