The economic conundrum of CRBTs

For the uninitiated – CRBT stands for Caller Ring Back Tone.  It’s the wonderful song you hear in lieu of a ring tone when you dial into someone’s number.

CRBTs are expensive.  Here’s how much it costs:

* Cost of calling into a chargeable IVR system to select your music – Rs 10

* Cost of downloading a CRBT – Rs 15

* Monthly rental for playing a CRBT – Rs 30

* Average frequency of changing a CRBT – 0.8 times a month

* Total monthly cost = Rs 30 + 0.8*(10+15) = Rs 50

So, this is expensive right?  In a market where few people pay Rs 75-100 for a legit album, there’s a bunch of people paying Rs 50 p.m. for a song they don’t even listen to!

How big is this?  Very.  Mobile music revenues account for 50-60% of several music albums, and CRBTs are a dominant contributor to that number.

Now here’s the conundrum.  Who actually downloads these tunes?  If you checked on the average office-going city slicker, you’d probably find a 10-20% probability of these persons having a CRBT.  But if you went lower down the SEC ladder – to the carpenters, drivers, household help, coffee boys etc – you’d witness a 70-90% penetration of what is probably the most expensive music in the world.

Why do people with an average income of Rs 3-10K p.m. spend so much on a tune meant for others?