From ringtones, ring-backs and wallpapers to applications, games, virtual goods and video, the mobile content industry in the United States is booming like never before.

We are currently seeing a shift in the way that content is consumed in the U.S. There are two main channels in the content market: on-deck (distributed via wireless carriers) and off-deck.

“In the past, content was distributed via syncing up to a PC and downloading ringtones and other forms digital media,” said Michael Iaccarino, president and CEO of Mobile Messenger, Los Angeles.

“Now, with the continuous advancement in the mobile Web, content is distributed over the airwaves on feature phone and smartphones, giving consumers on-the-go access to content at their fingertips,” he said.

Frost & Sullivan has some interesting data on the U.S. consumer mobile content market. The findings show that off-deck content is growing at rapid pace—even faster than it would have without smartphone prevalence.

“Smartphones—and more specifically applications—have a significant potential of driving content sales and maturity,” Mr. Iaccarino said.

Mobile payments and mobile commerce are continuing to be key drivers in the mobile content market place.

Juniper Research recently predicted that the mobile payments market will reach close to $630 billion by 2014, up from $170 billion this year.

“This is a very significant trend for the overall industry, and one in which Mobile Messenger plans on playing a large role,” Mr. Iaccarino said. “As social media, applications and innovative business models continue to look for a monetization model, companies such as Mobile Messenger become a great potential partner.

“Our strong connections, carrier billing and products that support a variety of mobile strategies, position us to help companies take advantage of this growing channel,” he said. “I believe we will continue to see this space explode in the coming years.”

Other companies operating in the mobile content space are similarly bullish.

“From our perspective, mobile content in the U.S. is booming,” said Jeff Sass, vice president of business development and chief evangelist at Myxer, Deerfield Beach, FL. “We have seen consistent growth in the number of content downloads from Myxer, especially from the mobile Web.”

Myxer claims that it has served more than 1.2 billion downloads to date and that it is currently at a pace of 90 million downloads per month.

“As the networks, handsets and mobile operating systems have continued to improve dramatically, consumers have become very comfortable with the mobile phone as a very personal entertainment device and are embracing more and more mobile entertainment and personalization content, from music and audio to images and video, and of course apps and games,” Mr. Sass said.

Types of mobile content
Music (ringtones, ring-back tones, full-track downloads and video), applications, games and traditional text-based services continue to be popular types of mobile content.

“We all know a very large portion of mobile content sales is in fact ringtones,” said Leo Giel, vice president of sales for North America at m-Wise, New York. “That being said, I don’t think it is any surprise or big mystery that ringtone sales have been steadily declining for the past few years.

“The good news for publishers, in my opinion, is this decline will begin to level off this year or next year,” he said. “The ringtone market is here to stay for many more years and the creative and aggressive players will prevail.

“The more unique content opportunities offered to the consumer the better.”

Ring-back tones are currently very popular in the U.S., while some say that ringtones are declining.

“I believe ring-backs to be increasing in sales,” Mr. Giel said. “I still do not think ring-back tones will surpass ringtones this year, but this segment of the mobile content market is certainly growing.

“I believe ring-backs have a nice opportunity for growth and upside along with interactive content services,” he said.

Unsurprisingly, companies that sell ringtones are claiming that sales are as robust as ever.

“From Myxer’s point of view, the rumors of the ‘death of the ringtone’ are greatly exaggerated, as we see continued growth in ringtone downloads and not just in the music category,” Mr. Sass said. “Comedy, nametones and spoken-word ringtones are also very popular, as is branded mobile content leveraging popular logos and jingles as ways for consumers to show their brand affinity.

“The demand for mobile content goes well beyond music and ringtones, and there is demand for images and screensavers, as well as videos and also SMS-based text information such as our Buzz Alerts,” he said.

“As for growth, clearly apps and games will continue in popularity for the near term, but with the direction handsets are taking, the most potential for growth will likely be in the video category.”

Payments for virtual goods and services also represent an expanding marketplace. 

With larger, brighter, higher resolution screens on the newer smartphones, video content is increasing in importance, both as streaming media and as downloads for viewing.

The increased capacity of SD cards has also helped users consume longer-form content on their phones.

“From Myxer’s perspective, video downloads are still more short-form snackable content, but we suspect that over time we too may offer longer-form entertainment, and on the music side we will soon offer full tracks,” Mr. Sass said.

“One clear trend that has emerged is for the mobile phone to replace a dedicated MP3 player for many folks,” he said.

Monetization models
From pay-per-download to subscription-based to ad-supported to micropayments, various monetization models are competing for dominance.

Which strategy to follow depends on who you ask, and where they sit in the ecosystem.

“As it relates to monetization, payment solutions and off-deck, the strongest models are content owners connecting directly to an aggregator with a product offering including content management capabilities,” Mr. Iaccarino said.

“Going forward, smartphone adoption will lead to an increase in data plans and access to the mobile web, creating broader distribution and monetization of content,” he said. “Clearly applications is where the market is focused.

“The question is, how can these applications be monetized? Mobile Messenger is working to answer this crucial question with the introduction of a new product, so stay tuned.”

Interactive services integrated into broadcast media is currently dominant, according to Mobile Messenger.

Typically, services that offer interactive experiences for prizes and rewards can garner subscription fees from $5.99 to $9.99 per month, depending on the offering.

“Interactive services are a great way to engage the consumer and a very compelling experience when executed well,” Mr. Iaccarino said.

Content aggregators are becoming much more aggressive in how they bundle their products. They are also starting to explore new offerings that can be combined in the subscription experience, so the consumer is not just limited to ringtones, wallpapers, videos and games.

“I think you will see increase in ring-back tones and interactive mobile services for rewards,” Mr. Giel said. “It is refreshing to see a lot of companies becoming more creative in their approach to the consumer.

“In 2010, I think you will see a lot more creative plays that include new and very aggressive subscription offers,” he said. “There are many great mobile social media and fan-based plays—companies are definitely finding unique ways to monetize these lists.

“Physical, digital and mobile bundles will become more popular and can really add great value to the bottom line.”

Advertisers looking for branding opportunities need not worry, as the ad-supported model is not going anywhere.

“As a company that is built on the premise of ‘no surprises or hidden charges,’ Myxer is very bullish on the ad-supported model and various ways for advertisers and brands to support and subsidize content that is delivered at no charge to the end user,” Mr. Sass said.

“We also believe in payments and micropayments for specific items on an a la carte basis if that is the desire of the content owner,” he said.

“We think various permutations of ad-supported will continue to grow and increase in prevalence as content owners, advertisers and brands continue to see the value of using mobile content to drive massive and lasting engagement with their constituents in ways that can drive other transactional revenue.”

Innovation a must
Just like any business, the companies resting on their laurels will face very difficult times and those that choose to innovate and add new services will prosper.

Mobile content companies will begin offering complimentary products that offer the consumer many more choices than just ringtones, wallpapers, videos and games.

“You will be able to get personalized content for religion, inspiration, career advice, music, movies, interaction with your favorite brands and shows and more,” Mr. Giel said. “If I have it my way, major handset manufacturers will ship devices equipped with a content configuration interface.

“It would be a similar experience to configuring your online portal, but rather than browsing every day, you would receive all your content choices pushed to your handset every day,” he said.

For example, when consumers turn on their device, they could subscribe to the Mark Burnet reality mobile channel, Deepak Chopra daily inspiration message or the HGTV How to Mobile Series.

“This would allow content providers to engage consumers on the device they have with them at all times, build a one-to-one relationship with their consumers, generate revenue and learn critical information about the consumer using analytics and data mining,” Mr. Giel said.