So I was speaking with a colleague the other day and he coined a new term to the describe the forthcoming Apple ringtone purchasing and download behavior - he called it “side-decking”. It’s a combination of side-loading and the deck - let me explain.
The ringtone and actually the whole mobile content industry is going through a radical shift. The two common methods to purchase and download mobile content has been either through a carrier deck or via premium-rate SMS through a storefront. Both of these approaches perform a mobile web or WAP download of the content.
In the last year, three trends have changed the traditional download behavior:
1. More and more phones are becoming USB enabled meaning I can connect my phone directly to the computer and drag content to it
2. Phones have standardized on a few codecs. It’s hard to find a phone that doesn’t support MP3 and JPG meaning standard ringtone and wallpaper formats
3. Laptop sales have been climbing meaning Bluetooth at the home providing yet another way to connect your phone to your computer
These trends collectively have spurred side-loading, the loading of content with your phone on the side (of the PC). Part of the reason that mobile content revenues have started to go flat is because of side-loading - consumers can make and download ringtones to their phone for free and thus circumvent the carrier’s walled garden.
Now Apple is demonstrating (in mass-market) a new model with the sale of ringtones from the PC, essentially a deck on your PC. This will have a couple of side-effects:
1. Demonstration of a carrier losing control. To date, US carriers for the most part, have had control over the flow of content to their phone. It’s not clear that Cingular is even receiving a revenue-share which will create a rift between Apple and other handset manufacturers in terms of the special-treatment relationship from Cingular.
2. Apple is going to change the purchasing and content loading behavior. They will teach in mass that you can load content from your desktop whether for free through applications like ToneThis or purchased through iTunes.
Going forward, things are going to begin to look bleak in the mobile content industry and carriers should be scared. Mobile content rev-shares compose a large chunk of their revenue, over 1B on BREW alone last year. Unless the content providers and the carriers adapt, side-loading and side-decking will win. Apple will also win being the front-runner, since no application is as pervasive as iTunes in terms of being a desktop content store-front.