Making Ringbacks Sing

David Murphy talks to Jon Orlando, CMO and VP Marketing at ringback tone company NMS Communications about the companys recent NMS Success survey

DM: What was this survey all about John?

JO: The survey began in the first quarter of 2006 among an audience of mobile operators. We surveyed 26 mobile operators that have deployed the NMS MyCaller ringback tone service to look at penetration rates and to compare and contrast the performance in different regions and look at some of issues that have cropped up with the service. Its a bit of a thought leadership piece on ringback that we will make available to the operators that worked with us.
In each region, we looked at the clear leaders and clear laggards and spent lot of time talking to the operators, especially the ones who were not seeing the results they wanted, about what they can do.

DM: So what did you find out?

JO: Lots of things. The first was around fully utilised product features. We have seen that there have been a lot of services with basic ringback features just ringback and no potential to select the Caller ID for other people. A lot of times the thinking is just to launch a simple service and people will adopt it. But the user never hears the ringback. You only hear the response of the person who called you. So if you dont get a lot of response, you forget about it.
We have noticed that where operators have launched gift services or other applications that involve other people, those people tend to respond to viral marketing a little quicker. There are a lot of features that get engagement with the subscriber. Its not a ringtone, its a personalisation experience that the caller gets. I have seen things in the pricing model in the simplification of that. The subscription plus content fee model gets confusing and people worry about what they are being charged for certain things. Also some throw in a subscription waiver as long as you buy some content, so the subscriber thinks they are getting a lot of value.
The next thing is around making it easy to find. This might seem an obvious conclusion to come to, but with all the thing competing for attention on the deck, and the different focus on different applications, we have found many cases where we are competing with other applications for placement, where we are not high in the WAP deck or the IVR system, so making it easy to find is key.
As far as content goes, you dont need a massive music catalogue, but you do need to keep the content fresh. Its the long tail theory, where a lot of different people want to buy a specific piece of segmented content, and trying to mix in some of that content with the basics makes it more personalised experience. 
We have also learned that ringback is a quirky application in terms of its viral nature. SK Telecom launched a service in Korea and it sat idle until a famous late night talk show host made a phone call to a star and kept hearing music, and the star rang back and explained it was their caller ringback tone. After that, it took off in Korea.
Most operators in the world looked at that example and thought they would get a 60% take-up, but its taking time to get that clustered effect. But we are now seeing some regions where operators have launched and are being more successful. Our subscriptions and personal footprint tripled in the last year and with more people launching, the service awareness is there and the fun is there, and we are also seeing content purchases increase as there are multiple groups to buy content for.

DM: So talk us through how it works.

JO: Ringback is a very network intensive application. We have to intercept the ring out of a switch and play music until someone picks up the phone, and then hand it back over, so there is a lot of software written by switch makers to allow this to work. All the major switch vendors, Nokia, Lucent, Motorola, had to come to the table and the pricing was insane initially. Now its normalised and in the mainstream.

DM: And I gather you have designs on ringback tones as a carrier for marketing content

JO: Yes, we see ringback as one of a potential suite of applications where we allow marketing and advertising to be injected in the callflow. If you call me, there is 10 seconds where I can guarantee you will hear something, and I will have your undivided attention. This could also apply to calling with picture push.
We are seeing a lot of interest in this now. There are regulatory issues when it comes to user-generated content (UGC), ad content or targeted marketing content in ringback tones as an audio, video or picture push. But there are also some interesting business models. 3UKs Seeme TV is a good example of UGC where there is a paid-for  element to it. Theres also a lot of interest in terms of usage and we see the same thing applying to ringbacks and pictures, so we are looking at a lot of places where we can insert something meaningful.

DM: Is there not a danger people might get irritated by this sort of thing?

JO: We are taking a look at it in terms of viability, about what would work best. It could be a simple DM approach for ringbacks perhaps. It could be that today we have cases where a subscriber calls another subscriber and hears music and they are not sure what it is and we know they dont have ringbacks, so we can send them an SMS with an offer of a months free usage. Another idea is that every 10th caller gets to vote on your ringback and at end you get an SMS saying only 4 out of 10 like it, time to update,
Theres also a cross-selling function. If you hear music you like and want to get it, and also the wallpaper, there is an opportunity to cross-sell content bundles. These  can be problematic in terms of  premium pricing, but we have found there is always a small percentage of insane spenders, and we try to find out who they are because they value the content more than the average buyer. So there are some tangible elements we are working on.

DM: And whats the timeline for all this?

JO: All the things we have talked about are 07 issues for us to bring to life. We have a line of sight on those for this year. We think specifically in Western Europe, the stage is set for some 324-based 3G video now the handsets are up and there are some benefits to packet-based video. We also see a lot in the area of early mobile marketing and plan to be in the pack there as well.
We are a leader in 3G, H.324-based video. We have seen operators interested in packet-based video, waiting for DVB-H (Digital Video Broadcasting - Handheld) and DMB (Digital Multimedia Broadcasting) standards. Now if you look at Verizons VCAST (Mobile TV) service, it takes 15 seconds to acquire the TV signal, and 10 seconds to switch channels. In between, there is no way to interact with what you are watching. We are excited about the 3G video standard, Interactive Mobile TV, where it acquires the video in two seconds and switches channels in one and has DTMF (Dual Tone Multi Frequency) capability and text overlay that creates a very interactive video platform that could be the front end of a lot of personalisation.