CTIA: RealNetworks buys WiderThan

LOS ANGELES--RealNetworks yesterday announced it has agreed to buy mobile music distribution company WiderThan for a $350 million, marking the second time a mobile music firm has been scooped up in as many months.

Nokia acquired Loudeye for $60 million in August, and last September Openwave bought Musiwave for $121 million, creating a wave of consolidation as the nascent music download and streaming market picked up steam. So far, full-track music downloads and streaming radio services account for only a tiny portion of carriers’ music revenues in the U.S., but carriers seem to be counting on music as being a huge revenue driver in the future. Both Sprint and Verizon Wireless have launched full-track over-the-air download services (Verizon’s using the WiderThan platform), and both have been promoting new digital music phones like LG’s new Chocolate device heavily.

WiderThan’s large purchase price, however, probably comes more from its extensive ringback tone business than from its full-track music distribution platform. Those ringback tone sales accounted for much of the $62 million in revenues WiderThan reported in the first half of the year and have been a key sales driver in Korea, where WiderThan first sprang from parent company SK Telecom.