The overwhelming popularity of ringtones and ring backs has given birth to an unprecedented cottage industry: mobile music labels that deal directly with artists to create content for wireless phones.
INgrooves became the latest entrant in the developing space last week. The digital record company launched a division that will create music exclusively for wireless devices, distributing the tunes through mobile storefronts like 9 Squared, Dwango Wireless and Hudson Entertainment.
The new label has the benefit of a parent company that has existing relationships with recording artists such as R&B singer Kieran and house music band High Caliber. INgrooves Mobile Music has already licensed music from The Crystal Method, Thievery Corp., Grandaddy and Felix da Housecat.
But while INgrooves has become a well established-if relatively small-player in the digital music market, the new subsidiary will help it keep up with the mobile space, said Adam Hiles, INgrooves’ president and director of music licensing.
“Mobile (music) is its own space now; its own world,” said Hiles. “You have the big players, handset manufacturers and operators who are looking for exclusive, customized content. And we provide something that a label cannot.”
The first label created exclusively for mobile content was Gofresh, a German outfit formed in 2003. A year later, a Japanese content provider named Index Corp. created a new label to create music for handsets.
In North America, BlingTones was the first on the scene, launching late last year. A division of media firm Lagardere Active North America, BlingTones boasts an impressive stable of stars including Missy Elliot, Jay-Z, Eminem and 50 Cent. The label offers original 30-second voice- and ringtones as well as urban-themed screen savers and wallpaper.
Several start-ups have followed BlingTones’ lead. Some are subsidiaries of established music companies, but most are mobile-content providers striking deals with artists and effectively circumventing traditional record labels.
While platform-specific labels may be new-artists don’t have different labels for CDs, digital downloads and videos, for instance-the new labels are necessary, Hiles said. Not only do mobile phones require a different type of content than any other platform, aggregators know how to market and deliver that content to wireless users.
“You need content that is specific to the mobile world; things that are only going to run 15 or 30 seconds,” said Hiles. “It’s a different way of thinking.”
Earlier this year, Zingy announced a series of deals to bring hip-hop and pop content to wireless phones. The aggregator launched ringtones and ring backs from artists and producers including Kanye West, Aaliyah and Rockwilder.
The offering highlights the delicate balance content providers must find when dealing directly with artists: At the same time they’re partnering with traditional labels to offer musical content, content providers are cutting labels out of the loop with exclusively mobile deals.
“The record labels are valuable partners for Zingy; we absolutely need them,” said Andy Volanakis, Zingy’s chief operations officer. “But we have found a great deal of success with this, and we have been able to walk the line” between ally and competitor.
While aggregators are circumventing established labels, though, carriers are circumventing aggregators. Some operators are going directly to record labels, eliminating the middleman for their music offerings.
And mobile music labels may be living on borrowed time, as some labels are beginning to include mobile content in their contracts. If that becomes a standard practice, aggregators will be completely cut out of the music-production business as the labels create their own ringtones and ring backs for carriers.
It’s unclear if major labels are willing, or even capable, of addressing the demands of the mobile market, though.
“I know a lot of big labels throw (mobile) under the category of `new media,’ ” said Hiles. “They need help. They can’t keep up with how fast things are moving.”
The business model likely to emerge is one that partners traditional labels with smaller firms familiar with the wireless space. The key to tapping the mobile-music market lies in offering a slew of branded content options, according to Ted Suh, chief marketing officer of 9 Squared, a Denver-based aggregator.
“(Partnering with artists) is something everyone has to think about in terms of creating special content” for mobile use, said Suh. “There’s going to have to be a more compelling offering. People are offering voice ringers and calling that `exclusive content.’ Quite frankly, that doesn’t really sell.”
