A few years ago, I worked for one of the largest recording companies in the world, Universal Music Group, in their offices in Jakarta. I joined in 2004 after little over a year at Soundbuzz, itself an early player in the digital music industry, to help UMG establish a digital business in Indonesia. My title was something along the lines of ‘New Media & Mobile’. I guess it was still new back then, and mobile was basically about selling monophonic ringtones.

I joined Universal at an opportune time — it was around the moment when Telkomsel was starting an odd service called ringback tones. How it works is that the call tune — the sound you hear while your waiting for the person you call to pick up — is replaced with a 30-second snippet of a song. Fresh off running a ringtone production division for Soundbuzz, it still took me a while to digest what the product actually is, because at that time the service wasn’t up.

While Indosat was the first telco to run trials of the ringback tone service in Medan, Telkomsel was the first to claim a commercial launch, albeit still limited to a few cities at a time. The rollout was relatively slow as it required certain hardware to be installed at every major hub to play back the songs to subscribed users.

Telkomsel spent money in creating launch events in Jakarta, Bandung and Bali to announce the product and educate the market, while Indosat and XL sped up their efforts to launch their own services. Since the service used original recordings, the telcos engaged recording companies from the international majors and the local labels, and both parties worked on how best to launch these services and how best to educate the market about the new product. Adoption was slow and clueless, as with many other products, and a song featured on the service’s IVR quickly became the top seller as users did not know how to activate other songs.

This stage would be the product introduction phase, where even the ones offering the product — even with tons of research and resources — do not know how exactly adoption will go.

After a few months, the telcos and the labels figured out how best to market the ringback tone service — through SMS activation. As long as you knew what the code of the song was, you could activate it — taking a play from ringtone sales. These codes were promoted by the telcos and labels wherever they could, which caused many locally-produced CDs and cassettes (yes, they still sold cassettes in 2004-2005) had ringback tone codes printed next to the song titles. Mimicking ringtone sellers in Europe, ringback tone codes were also promoted on MTV, which provided the service with an added growth boost.

The growth stage occurred in 2006, where ringback tone sales started reaching record-high numbers, in line with the hottest songs currently in play by the media. The service continued to grow on all telcos, and not a day could go by without you seeing a ringback tone code somewhere.

By a mixture of service simplicity and music, ringback tones had hit mass market. The telcos and labels did not hesitate to spend more for marketing the service, as it had a very high barrier to entry — compared to MP3s which virtually can be ripped, copied and downloaded by anybody, ringback tone services could only be run by companies with the resources of, well, a telco. With little risk of large scale market loss, the telcos and the labels forged on, hitting record after record of ringback tone sales.

I’m not sure when it happened, but it was some time between 2007 and 2008. A good product usually can sell itself based on its own merit, although still not without a little marketing and promotion. Before 2007-2008, it was enough to just promote the ringback tone codes properly (and strategically), and if the public liked the songs, you would get sales. Some labels even embedded ringback tone codes to video clips distributed digitally, to ensure any Youtube uploads would still retain the codes.

Then gradually, more marketing was needed. It began with simple things: win extra credit for your phone by activating this ringback tone, or win a new phone. Then the prizes also got bigger, to the point some programs were offering cars as prizes. These prizes were either offered by companies like content providers, whose previous business was selling now-unpopular ringtones, to labels by offering to commit to the prizes upfront for a share of the ringback tone manna. Some content providers event went as far as to set up their own music labels or distribution deals, to make sure they had ringback tones to sell and market share to grab.

The telcos also tried a few tweaks to their service — once ringback tones were a comparatively costly monthly subscription service, at around USD 1 per month, so they introduced weekly pricing. Telcos also introduced opt-out free trials, which would automatically renew to a paid subscription. And later on, you could activate ringback tones through WAP Push (and thus abused through mobile ads, like similar SMS subscription services) and even susbcribe to both an SMS subscription service and a ringback tone at the same time. It didn’t take much time for some companies to figure out how to use these methods as quick cash grabs.

I guess we’re way past where the product matured and the market eventually became saturated with offers. In my last years at Universal, it was either you picked a mass market act and spent big, or you simply didn’t get sales — to put it in extreme terms.

The amount of money spent to maintain a proportional level of sales went up year by year, and by 2009 I was sick of ringback tones and wanted to develop new products. Just by the numbers I knew that ringback tones would shortly become unsustainable, but at that time there were no new significant revenue streams to develop at that time. So we persevered. And around the same time, some smart, albeit probably too greedy, companies started abusing the system.

in 2009-2010, SMS music subscription services had become commonplace, where you would pay, say, 10 cents a day to get “music info of your favourite artist”, and could download a ringtone from the content provider’s WAPsite and even get a “free” ringback tone (automatic paid renewal, of course). Here is where the abuse took place.

Cases of ‘phone credits going missing’ started to enter the news sites, and eventually the government suspended all SMS charging-based services (including ringback tones) in October 2011. Users could resubscribe but only voluntarily, and at that point many people, who either did not know how to opt out of subscription services, or did not bother to renew their service, simply stopped becoming customers.

This is when the product died, and a whole industry [almost] died with it. The services offered still continue to this day, yet usage growth has never reached previous levels, and it probably never will.

Consciously or not, I have been working on projects with my product design education as a basis, and my years in the music industry as a framework to go on. I believe in products that more or less can sell themselves based on their own merit, although business sustainability is more of a balance between costs and revenue. I learned that a marketing cost needs to be a controlled percentage of projected sales, or else you’re screwed. I learned that the perceived value of a product can vary, and that it is something that I should try to control. And I learned that once customers feel betrayed, they will not come back, not if they have a choice.

I believe that a good product provides something valuable for the user, instead of just taking their money, and that the good sort of growth takes time. And yet, ‘death’ is just a step away, and comes closer by doing unnecessary — or greedy — risks. And that sometimes, you just have to move on.