Cellphones become jukeboxes as ring-tone sales take off

Let's say you get a popular song stuck in your head and you want to hear it more frequently than when it comes on the radio. You could go out and buy the CD, or you could do what millions of Americans with cellphones are doing: make the song your ring tone.

Scores of people are downloading digitized snippets of their favorite tunes - from the "Sex and the City" theme to hip-hop song "Hey Ya" by OutKast. While downloading hasn't typically brought joy to the music industry, this is one technological development that's prompting more talk of spreadsheets than lawsuits.

Ring tones are generating tens of millions of dollars in the US, as music fans pay a dollar or two to add personality to their cellphones. Record companies aren't yet pocketing much of the tens of millions of dollars ring tones generate each year in the US. That money is currently split between cellphone companies, ring tone providers, and songwriters and music publishers.

But as the ring-tone market and technology mature, the time is approaching when downloading actual songs - words and all - instead of computer-generated versions, will become more common. Eventually, music labels could start seeing more revenue from the estimated $3.5 billion worldwide market.

"It's a brand new revenue stream for content that they already have, which, given where the record industry is today, has to be good," says Alex Bloom, associate director of programming at Verizon Wireless. "I would say it's very important and significantly growing."

For example, Verizon and Sprint customers can download some portions of actual songs from providers on the company's website. And the marketing possibilities of having people's phones jingling with popular tunes aren't lost on music labels, either. Just this week, Hollywood Records, a Disney label, announced that it is making music available through a site called Xingtone.com. That site allows people to create ring tones from songs they already have saved digitally.

"We have to find other ways to bring revenue in, and master ring tones [the actual song] ... provides another source of revenue," explains Ken Bunt, vice president of new media at Hollywood Records. Pointing out that, at the moment, not many cellphones are capable of playing a full song, words and all, he says, "We're not selling the master ring tones ... right now, we're just trying to experiment and see what the marketplace tells us, to see how popular these are."

Even as new uses are unveiled, people are taking advantage of what's available now, such as assigning different ditties to different phone numbers. Want to know it's your dad calling? How about using the theme from "The Godfather" as some consumers do? Zippy ring tones also allow people to tell without looking if the call is from someone at work or a friend.

"It actually makes it easier for me to ignore phone calls," jokes Alex Savitzky, a Marlborough, Mass., resident who works in IT support. He uses the Indiana Jones theme for work calls, and the theme from the Super Mario Brothers video game for his friends. "The Super Mario one is a conversation starter, because everyone remembers it from when they were a kid."

Young people are particularly smitten with musical tones. "Far and away, it's hip-hop songs," says Cindy Lundin Mesaros, a spokeswoman for Modtones, a ring-tone provider, of their top sellers. With young people especially, "when your phone rings, it's very much a personal thing, it says something about you. So people want the latest, they want what's new."

For 2003, the Top 10 most downloaded songs from Modtones included four songs by hip-hop artist 50 Cent, as well as theme songs from "Mission Impossible" and the "Halloween" movies.

Advancing technology, of course, is what's allowing cellphones to become radio-like (though there are some who argue that a phone may not be the best way to enjoy music).

With phones becoming fancier, more people are taking advantage of the new options. Analyst Dana Thorat at IDC, a technology research firm, estimates that 9.9 million people downloaded a ring tone in 2003, up from 4.8 million in 2002. IDC predicts that number will grow to 54.3 million by the end of 2007. That will add up to some serious change: In 2003, US revenue from ring tones rang in at $56.8 million.

"[It's] a very impulse purchase," says Ms. Thorat. "It doesn't take a lot of thought to download and pay a buck or two for a ring tone. And it's something that you'll go back again and get another one."

But in some cases, it costs more to download a ring tone than an entire song. And some people, like Mr. Savitzky, say that while $1 isn't much, he doesn't want to do it all the time. "I try not to buy too many. It's just a buck for one, but they add up," he says. He likes having the option to change, but says, "It's not even something that I really think about anymore; it was a novelty at the time I got the phone."

Perhaps boding well for the record industry, he says he could be enticed to do more downloading if actual songs were more readily available. That would allow him to edit a song to further personalize his tone. "It would sound better," he explains, "and opens the possibility of making my own."

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