Last week, I wrote a basic introduction of the unsung music startup in Indonesia, the content providers. This week I want to write a bit more about how they came into being and how they make money from digital music. Of course, any industry that makes tons of money is not without controversy, so I’ll also touch on that. But on the whole, the ringtone market in Indonesia actually was born from what we now call crowdsourcing – as back then it was easy to make monophonic ringtones, with your PC or even with your phone, people made and shared their creations through online forums. Then somebody had the idea to sell these homemade ringtones to others. Eventually, they started hiring people to make these ringtones themselves.
In the early 2000s, companies wanting to capitalize on the ringtone business had to use a premium 0809 number through a landline number – the same prefix used for premium sex calls – where a user would select a ringtone via the Interactive Voice Response system, and then the ringtone would be sent directly to the mobile phone. Early players were PT Katagiprima (now Iguana Technology), and Klub Mobile. Klub Mobile was notable since they were shut down by a lawsuit from the song publishers in 2003, who sued because Klub Mobile was selling their intellectual property – songs – without permission and without any royalty payments.
Read the rest of the post at Dailysocial.