The Ringtone is All But Dead
The ringtone is going extinct.
Owning a ringtone business is like being the last guy with a paging service. Remember when you could go to the mall in the crappy part of town and buy a pager from a dozen different kiosks? I don't either because that was forever ago.
Sure, there will always be a consumer or two who fails to adapt to new realities and holds on to legacy habits--this is why there are, in America at least, a significant number of people who still pay $24.99 or whatever it is to access the Internet through America Online, much as they did fifteen years ago.
The ringtone business exploded because people had favorite songs they wanted to put on their phone. And while it is true that you can now put ringtones on your phone for free, I think there has been another decline of note here and that has been an evaporation of music being made that people were willing to pay for. As the number of artists has dwindled to the point where the only people making music are the ones who either love it or the ones who haven't gotten the memo, so too has the number of songs worth getting the ringtone for.
Trends being what they are, the ringtone business has fallen on hard times. Good riddance.