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Charms of CRBT

An exploration of CRBT operations

The color ring back tone (CRBT) market has enjoyed significant success and brought in substantial income throughout the world. Is there a secret to success in CRBT operations?
By Bai Li
Music is universally loved and almost all mainstream IT enterprises, telecom operators and Internet enterprises in the world have clear strategies for developing digital music and entertainment. CRBT service has let telecom operators expand into entertainment and multimedia. Su c c e s s f u l i n r o a d s m a d e b y A s i a n operators, including SK Telecom and China Mobile, are being replicated by other operators worldwide. Operators in Russia, the Middle East and even Africa have reaped the benefits after making significant breakthroughs in their CRBT operations.

hortly after it originated in the Asia-Pacific region in 2002, CRBT service gained huge popularity in a short time and was quickly introduced to other markets. The creator of the service, SK Telecom has earned magnificent profits. China Mobile, a successful follower, has achieved over 68% service penetration rate in CRBT applications and raked in more than USD1.45 billion from the service in 2007.

Secrets to successful CRBT operations

Setting up a healthy ecological environment
In the digital music field, huge user demand has boosted the formation and gradual maturity of a digital music industrial chain, which is comprised of
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Strategy New opportunities

An exploration of CRBT operations Internet companies, record companies, content providers (CPs), operators and mobile phone vendors. Many players in the value chain have accumulated rich experience in content, innovation, channels and marketing. Similarly, CRBT service is also in need of a complete industrial chain, which is expected to drive the market towards even more prosperity and sustainable development. Operators should integrate resources in the value chain with an open, cooperative attitude. Content and service providers are important components for operators. When looking at the development of successful CRBT service operators, we can see that when they first deployed the service, effective business models were established to attract and encourage CPs and SPs to jointly participate in marketing. Based on strengths in content and channels, partners deep understanding of local markets, service innovation capability and rich marketing experience, operators quickly attracted a large number of users to overcome operational difficulties in the early phase. User numbers have been growing constantly and revenues have been increasing. As a result, operators have been continuously making service innovations, expanding promotion channels and exercising firm control on the industrial value chain. Wireless music bulletin: According to the quantity of CRBT downloads, an operator can establish a music chart based on the real consumption data, to provide users with wireless music services. This helps an operator build a complete industrial value chain and form a unified wireless music marketing platform. Wireless music club: By integrating the music value chain, operators can provide users with one-stop music consumption and entertainment services, including music forums, star concerts and discounts from associated stores. Each operator can run a wireless music club as a bridge of contact. With rich and interesting products, the operator can cultivate highly active, loyal users while introducing a lot of users with strong musical requirements and high consumption to CD companies, CPs and SPs for added revenue streams. In addition to content-based operations, operators should further optimize the CRBT subscribe modes. At present, CRBT access modes include the wireless application protocol (WAP), web, interactive voice response (IVR), short message service (SMS), unstructured supplementary service data (USSD), and customization by the customer service center. With the development of services, operators need to optimize existing service processes and add more functions like CRBT duplication and CRBT search. Operators should also enable the built-in SIM Application Toolkit (STK), so that users can conveniently order and use the service.

Content-based operations
The quick development of the CRBT service can be attributed to it being a means of expressing different users personalities and tastes. Users have diversified requirements; new hits emerge and there are constantly new requirements t o f u l f i l l . To r e m a i n c o m p e t i t i v e , operators have to continuously create new content to enhance user experiences and this is driving CRBT service in better development direction. In the upcoming years, value in the digital music field will be generated from content-based operations. The CRBT service should provide users with a brandnew content platform, offering one-stop music consumption and entertainment services, including music downloads, sharing, promotion and communications. At present, widely-used CRBT content package forms include: Music box: Each music box normally comprises 3-6 CRBT songs, and the price is lower than the sum of all songs in the box. The CRBT music box can be used in various marketing activities. It can be used with the launch of new CDs, in club and membership activities, and in Internet marketing. It remains quite popular among users.

Flexible charging policies

Most operators require that users pay monthly rental, content download and browsing fees to use the CRBT service. In developing the C R BT s e r v i c e , o p e r a t o r s normally adopt the tariff model of monthly rental + content d o w n l o a d f e e t o e n s u r e stable income. In different development phases, 37 JAN 2009 . ISSUE 46

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operators should adopt different tariff models and pricing polices to attract users. In the CRBT impor t period, the operator can offer a free trial period of 1-3 months to lower the entry threshold of users. This promotion allows the operator to quickly deploy the service, cover users, increase popularity of the service and get a lot of users onboard in a short time while increasing the penetration rate. After the penetration rate has reached a certain point (generally about 10% penetration), the operator may concern more about the loyalty and activity of users, rather than the numbers. In this phase, the operator can set up a membership program to increase user loyalty. At the mature period of the CRBT service, when the penetration rate increases slowly, the operator can stimulate consumption and improve the average revenue per user (ARPU) of the product in the installment-by-month mode.

popularity, improve product influence, and increase service stickiness.

Operational policies for different phases

The CRBT service development cycle can be divided into four phases: launch preparation, import, growth and mature.

Launch preparation phase

Tasks in the launch preparation phase include market research, user experience design, tariff policy making, brand name orientation, user recognition and media promotion planning. The phase mainly paves the way for future service development.

Import phase
Being a receiver-paid, caller-perceptive service, the CRBT service can be viral. After one user orders the service, other users can have the experience when they call in. The promotion can be tremendous. In the CRBT service import phase, the operators major task is to find seed users, who can kick off the viral marketing among other users. During this phase, the CRBT service should be oriented as a fashionable, personalized service targeting people under 25 years old. The major marketing mode is experience marketing. The operator can offer free trial service in order to attract a big number of users in a short time. Product design for this phase might not fully satisfy user experience. User surveys should be conducted, and access portals should be optimized. The operator should strengthen marketing in various forms in order to enhance product recognition.

All-dimensional marketing
The marketing of the CRBT service is a cross-industrial, multi-channel and experience-oriented process. Each operator can form an all-dimensional online, offline marketing network comprised of existing channels, record companies, CPs and SPs, other media and websites. By using the online precise marketing mode, the operator can analyze the consumption behavior of users and conduct oriented, precise marketing, including personalized, similar and new product recommendations. Recommendations can be made through the SMS Push, WAP Push, and manual call-out. The operator can also make recommendations and marketing through the CRBT portal websites and network associations. An operator can also make offline channel promotions. In addition to inhouse promotions, the operator can promote the CRBT ser vice through traditional media, such as TV, radio, newspapers and magazines, and outdoor advertising. The operator can also cooperate with mobile phone stores and record stores in marketing. Periodical meet-the-star events can be held to gather

and benefits to users. In product and function design, the growth phase focus is on improving the users stickiness in using the CRBT service and decreasing the churn rate. For example, each operator may design a lot of annual fee or half-year fee products to cut down on users opting out. The operator can also design monthly fee products to lower the costs of changing CRBTs and increase user interest in using the CRBT service. Users can be invited to make CRBTs. They can place DIY CRBTs in their CRBT databases or sell their DIY ringing tones, so that the users not only have fun making personalized CRBTs, stay loyal and maybe even profit a bit. In the growth phase, the operator should simplify the CRBT operation model and process to improve user experience. For example, when a user dials a number and hears a good CRBT, he can duplicate the CRBT on his mobile phone by just pressing a key. Upon hearing a favorite song, the user can also send the song name or performer to the CRBT platform through the CRBT search function on his mobile phone, make fuzzy searches or order the CRBT. In terms of marketing promotions, alldimensional, integrated marketing should be executed in the growth phase, including event or holiday marketing, media ads, CD fliers, and recommendations through customer service centers. Marketing channels should be expanded to more locations including cinemas, Karaoke rooms and video rental shops.

Mature phase
In the mature phase, the CRBT user penetration rate can reach over 50%, which means that the market becomes gradually saturated. Users get into the habit of changing ringing tones and expect to make more friends through music. In this phase, the operator should conduct precise targeted marketing. New services, such as the music community and CRBT advertising, can be introduced to integrate the CRBT with digital music while keeping an eye on developing towards fullblown digital entertainment. Editor: Li Xuefeng xuefengli@huawei.com
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Growth phase
The service growth phase features low user loyalty, frequent changes of users in big numbers, poor user experience, major difficulties in using the CRBT functions, and low frequency of changing songs. The prime objective of this phase is to expand the user group and adjust the CRBT orientation to present the service values

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