Ring tones raise a buzz
By Benny Evangelista, Chronicle Staff Writer

While cell phone ring tones are music to the ears of rappers Wu-Tang Clan and Mobb Deep, another segment of the music industry is just getting more annoyed.

This week, the groups became the first music artists to release tracks from upcoming albums in the United States as a ring tone, even before the actual songs are available in stores.

"It's a great way to get people talking about the songs," said Stephen Rifkind, chairman of the rap groups' label, Loud Records. "I think it's going to be a tremendous benefit to us."

On the flip side, EMI Music Publishing this week banned the ring-tone versions of 300 songs. An EMI executive said the songs represent just a slice of the firm's overall music catalog, but the company had to honor the wishes of individual composers, writers and copyright holders who complained that annoying ring tones were not the proper venues for their creations.

The list included theme songs from popular TV shows like "The X-Files," "Star Trek" and "Buffy the Vampire Slayer," as well as the movie "Titanic."

EMI's move prompted James Winsoar, founder of a British company that claims to be the first to sell ring tones, to call for a European Union antitrust investigation.

"It appears that EMI plans to put ring-tone companies out of business so they can create just one ring-tone business that they own," Winsoar said in a statement posted on the Web site of his company, Phat Tonez.

The two latest developments demonstrate how ring tones have grown from a underground phenomenon into a multimillion-dollar industry that has caught the recording industry's attention, said Joe Laszlo, wireless analyst for Jupiter Media Metrix, a research firm.

"As the recording industry becomes more of a part of the ring-tone market, you'll see more control exercised about what you can have access to and what you pay for it," Laszlo said.

Ring tones have become all the rage in Europe and Japan, the first regions to have phones capable of downloading the electronic song snippets that give phones a distinctive ring.

For example, a phone beeping the notes of "Survivor" from Destiny's Child won't be mistaken for nearby phones playing "Get Ur Freak On" by Missy Elliot or the University of California at Berkeley fight song.

According to various analysts, ring tones selling for $1 or $2 a pop generate between $500 million to $1.5 billion in revenues worldwide. British research firm Arc Group projects 551 million ring-tone users worldwide by 2006.

Ring tones are still largely unknown in the United States, but that's rapidly changing.

Cingular Wireless started selling ring tones in May and was soon joined by AT&T Wireless and VoiceStream. Yesterday, Sprint PCS said it will start offering ring tones next week, with top tunes and classics provided by Sony/ATV Music Publishing and, ironically, EMI Music.

And there has been a flurry of song licensing and royalty agreements between music publishers like ASCAP and BMI and ring-tone startups like Sonera zed U.S., Zingy Inc. and YourMobile/Premium Wireless Services.

In general, the agreements call for copyright holders to get 7.55 cents to 10 cents per download plus a 2 to 4 percent cut of revenues.

Zingy Chief Executive Officer Fabrice Grinda said his New York firm, which is offering the ring tones by Wu-Tang Clan and Mobb Deep, logs about 25,000 free ring-tone downloads a day. The company, which started Sept. 5, plans to start charging about $1 per ring tone next year.