Summary:

Phonezoo has opened its service today, with the intention of becoming the first free mobile content community. For starters it’s offering a…

Phonezoo has opened its service today, with the intention of becoming the first free mobile content community. For starters it’s offering a ringtone creation service, which involves users uploading a file to the website and using a flash program to select which part to make into a ringtone — the demo I saw made it seem pretty easy. The ringtone is sent to the phone via an SMS message containinga WAP link. The user can then decide to share the ringtone (or not). The first thought that came to me was that this would really annoy the record labels and I brought up the subject of copyright. Phonezoo relies on the users to indicate whether the file is under copyright (which I guess they can use themselves as ‘fair use’ ) or is in the public domain. “We expect that they’ll be honest for a couple of reasons,” said Jim Mansfield, VP of marketing. “When they register on the site we know who they are through their phone number, and they can be identified if they share a copyrighted file.” Phonezoo also has various search functions, looking at title and artist, and plans a signature search function to identify copyright infringing material.
Phonezoo plans to expand the type of content which can be shared to include video ringtones, photos, wallpaper etc — it began with ringtones because its the most popular form of mobile content, and fairly easy to do. It also plans to offer WAP access to the personal homepages of users (which they’ve dubbed the “Cage”).
Phonezoo is going the viral route for marketing. “We’re actively seeking out the most popular members of the mobile generation in America,” Jim told me, saying the company had hired interns to work in local colleges. “We’re really trying to go after these highly social mobile people. And we think once they try it and understand the value…they’re going to tell their friends… we think this will grow largely by word of mouth.” The main targets are 18-25 college students. The company is also looking at creating a MySpace widget, so that people can put the ringtones they create on their MySpace page — or any social networking site. The idea is that this will promote the service, as well as get people to update their ringtones regularly.
Which brings us to the business case — which will kick in when Phonezoo reaches critical mass. There are several ideas…
The most obvious is advertising (CPM/CPA ads) and sales, with CEO Ram Ramkumar claiming that Phonezoo will be able to do a much better job of matching buyers to content. For example, if someone makes a ringtone from the song of a band, they might see an ad for the band’s next tour. There are also plans for deals with the labels to sell ringtones and/or MP3s to the customers…which will require the labels to offer something special for the ringtones rather than just clips of a song. This is just an idea at the moment. “We have to negotiate the deals with the labels at some point, that’s why we have to build a pretty sizable market first, ” said Tim. Ram said that the labels will like the chance to monetize their long tail.
Perhaps a better solution is the idea of ringtone as a promotion…”The ability to use ringtones as marketing vehicles,” according to Jim. “Let me give you an example, there’s a new Spiderman 3 movie coming out sometime next year. Warner Sony could pay a little bit of money to feature the Spiderman themesong on our site.” Users get the ringtone free, studios get pre-launch publicity for the movie when people receive a call, and Phonezoo gets revenue.
“We are in discussions with the carriers, there seems to be a lot of interest in something like this, we hope to capitalize on that,” said Ram. “Applications which push out user-gen content are going to the killer-app to get people to use 3G networks.” He said that Phonezoo is also looking at international markets, mainly Europe and other english speaking countries like Australia, NZ and India. Then onto Japan, China and so on.
Phonezoo has been angel-funded by: Tim Draper – Founding Partner, DFJ; Fred Mitchell – Former VP of Venture Dev., Adobe, Inc.; Phonezoo BOD; Anne Bonaparte – CEO, Tablus, Inc.; Phonezoo BOD; Steve Herrick – President, Continental Capital; Sean Fee – Angel investor and advisor; Josh Hannah – EIR at Benchmark Capital; Jack Herrick – Owner, wikiHow, Inc.; Vince Monical – Head of Partner Development, Google; Rich Chen – International Business Product Manager, Google. It’s currently seeking series b funding.

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