Ten years ago, three brothers in Germany founded Jamba, jumping head-first into the global fad of selling ringtones, which ultimately grew to be a billion-dollar industry. Since then, the well-known mobile content company has taken a number of twists and turns. Long story short, Jamba was acquired by News Corp (NSDQ: NWS) to become part of Fox Mobile, and celebrated its 10th anniversary last week under a circus tent in Germany. However, it’s questionable these days how much celebrating should be done.
Last week, on the eve of Jamba’s party, News Corp. confirmed rumors of its intentions to sell off the mobile division, and Fox Mobile, like other ringtone providers, are left scrambling to find new business models as the clock runs down out their traditional revenue streams.
At the height of the ringtone business, carriers, music labels, artists and third party companies, like Jamba, Thumbplay and others, were making piles of easy money — selling a snippet of a song for three times what a whole track sells for today. John Fletcher, an analyst at SNL Kagan, said ringtone sales in the U.S. peaked in 2007 at $714 million, and today are closer to 2005 levels. “It