A recent analysis performed by SNL Kagan found out that ringtone sales declined in the last year as subscribers learned how to add ringtones to handsets with no direct purchase through their carriers.
According to SNL Kagan, ringtone sales declined 24% in 2008, from $714 million in 2007 to $541 million in the next year. The decline has caused overall US mobile music revenues to post an annual decline. In addition, ringtone share of the total US mobile music market fell from 80% in 2005 to 63% in 2008.
"When we ask mobile music insiders what will replace ringtone revenues, RBTs (ringback tones) are most often mentioned," said SNL Kagan wireless analyst John Fletcher. "We estimate this category grew at a 37% CAGR from 2005 to 2008, from $77 million to $199 million."
Overall, the US mobile music market grew 20% from 2005 to 2008.