What it is: A kind of YouTube for ringtones, Phonezoo allows users to upload songs, samples, snippets and other audio files. Registered users can send tones directly to their phones for free. Phonezoo is angel-funded by private investors, led by Tim Draper.
Who's using it: The eight-week-old site already has several hundred thousand registered users, said Jim Mansfield, VP-marketing. The goal for 2007 is 6 million.
What about copyrighted content?: Phonezoo asks uploaders whether material is copyrighted and marks it with a small circled "c." When people try to send that content to their phones, a pop-up dialog box directs them to download a digital copy of the material. Then Phonezoo pulls the same snippet from the song, and people don't have to pay for a song they already own.
Advertiser opportunities: The business model is ad-supported. Traditional web ads appear on the site, and Amazon.com uses it to make contextually relevant suggestions. Mr. Mansfield said he's aiming for CPM rates in the $2 to $10 range. Marketing models still in development include direct sales of songs or concert tickets and promotions such as free songs or audio ringtones from movie studios and record labels or their partner marketers. "Every time a phone rings and there are a bunch of people around, it's free impressions," Mr. Mansfield said.
Why you should care: The ringtone market in general is exploding -- it was a $600 million business in 2006 -- and Phonezoo's target demographic of 15- to 25-year-olds accounts for 60% of ringtone sales. Phonezoo's research shows that about 60% of them want to change ringtones daily or weekly, and 91% would change tones at least once a month. More than half (52%) said they want six or more tones on their phone at a time.