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The Honolulu Advertiser
Posted on: Sunday, May 21, 2006

Cell phones music industry's hottest new promotion tool

By Yuki Noguchi
Washington Post


Revenue from music/audio downloaded to cell phones:

2003: $124 million

2004: $360 million

2005: $761 million

NOTE: Figures exclude ringtone revenue, which hit $12 billion worldwide in 2005.

Source: Yankee Group

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The first album from punk-pop band Yellowcard became a hit through conventional radio and CD sales. But the group broke into the big time only when it launched songs from its second album exclusively on a new stage: the cell phone.

Pictures of the quintet were blown up into 40-foot Verizon Wireless signs draped off the side of buildings in Manhattan. Their title song, "Lights and Sounds," became the centerpiece soundtrack for 30-second commercials promoting the cell-phone company's music download service. In total, Yellowcard benefited from $5 million to $10 million in advertising, something the band's label, Capitol Records, couldn't have afforded, said Deborah Klein, the band's manager.

The cell-phone business is retuning the music business. As radio's power to create big stars fades, artists and music labels increasingly look at cell phones to distribute and promote music. It's not merely about the 20-second clips called ringtones and ring-back tones, which have blossomed into a huge business generating more than $12 billion globally last year, according to the Yankee Group. The focus now runs to the heart of the music market: full-song downloads, music videos and other music promotions around rock concerts, interviews and sneak peaks into future releases.

"Telecommunications and wireless companies are the future's most promising distributors of music-based content," Warner Music Group CEO Edgar Bronfman Jr. said at a conference last week in Hong Kong. "How we affiliate with artists ... the deals we strike, the services we provide, all these ... are being transformed."

T-Mobile USA recently struck a deal to make Atlantic Records' rap artist Lupe Fiasco's new songs, "Kick Push" and "Just Might Be OK," available for download on the carrier's latest Samsung T509 phone, more than a month before the launch of the album in stores June 27. The same label's multiplatinum rap artist T.I. agreed in March to put songs from his new album, "King," exclusively over Sprint Nextel Corp.'s wireless network before the album sold anywhere else.

Sony Urban Music and Epic Records have released R&B superstar Omarion's new single, "Entourage," but only as a ringtone from BET Mobile.

Madonna's "Hung Up" was heard first on cell-phone commercials and as a ringtone before the tune even hit radio, said Michael Nash, a vice president for Warner Music Group, prompting desperate French radio stations to try to play the song off of a cell phone.

Those types of deals mark a sea change in the way music is promoted and sold. Record companies formerly released songs to radio stations to popularize the songs before albums would be on sale, and no retailers got special treatment.

In just the past year or so, music labels have started breaking with that tradition and looking at music promotion in a different way, Nash said. "There's a buzz-building effect of going to market on mobile," he said. Cell-phone carriers also closely monitor content that travels over their networks, which alleviates' record companies' concerns over piracy of early releases, he said.

Two-thirds of all music downloads in Italy come from cell phones, and in Japan and South Korea, mobile represents a majority of downloads, said Thomas Hesse, president of the global digital business for Sony BMG Music Entertainment. Some artists, like rap star T-Pain, sell more songs in the form of ringtones than as singles or albums.

A growing number of cell phones now come with speakers, memory, high-speed Internet connections and battery life that make them capable of downloading and playing full songs.