Cell Phone Rings Equal Bling Bling
By Chana R. Schoenberger

The newest hip-hop accessory for the urban set: a cell phone with rap-inspired ring tones.
Phone users are rushing to download tiny music files that blare when a phone rings or when the user has voicemail. And what they want on their phones is hip-hop music. The most popular ring tone downloaded onto cell phones last year was taken from the song "In Da Club," by rapper 50 Cent, and the current front-runner is Grammy winner OutKast. Seven of the ten most-downloaded ring tones in 2003 on the Cingular Wireless network were hip-hop songs.

Ring tones are big business, with $2.5 billion spent to buy them worldwide last year. In the United States, phone users spent $80 million on them in 2003, quadruple what they paid in 2002. This year, they are expected to spend north of $100 million, according to the Yankee Group research firm. Each file typically costs between 99 cents and $2.49, depending on the sound quality. But users don't seem to be deterred by the price.

"It's unbelievable the appetite that people have for these ring tones, and their willingness to pay," says Adam Zawel, director of mobile enterprise and commerce at Yankee Group.

Hip-hop music's popularity on cell phones can be traced back to both the phones and the users. People between the ages of 16 and 34 tend to be the ones downloading, and, as the Grammy awards attest, hip-hop is what they like to hear.

A funky ring tone is a way to personalize your phone, and "it becomes a fashion accessory at that point," says James Ryan, vice president of data product management at Cingular, a joint venture between SBC Communications (nyse: SBC - news - people ) and BellSouth (nyse: BLS - news - people ). In addition, the strong beats of rap translate well to the high-pitched tones of cell phones. "Because of the very rhythmic nature of the music, it just serves itself very well in the form of ring tones," says Michael Gallelli, director of content acquisition at T-Mobile, the wireless arm of Deutsche Telekom (nyse: DT - news - people ).
Ring tones were once a simple series of beeps, known as monophonic tones. In the last year, polyphonic ring tones have become available, with several beeps at once creating a more musical sound. Only recently have ring tones begun to incorporate actual snippets of songs, like the first few seconds of a Jay Z-Beyonce duet, or a celebrity's voice talking or telling a joke. These advanced tones, known variously as super tones, TruTones, Real Tones and by other brand names, are MP3-like files that require newer-model phones to play. Most of the major carriers either sell them or will be selling them this year. In total, about 40 million phones in the U.S. can accept ring tones.

When they're sold with the proper legal permissions, the economics of ring tones favor both the wireless carrier and the music's owner. The major carriers have agreements with vendors that license, format and support ring tones--as well as graphics and games--for sale to their wireless customers. Moviso, a unit of Bellevue-based InfoSpace (nasdaq: INSP - news - people ), sells downloading services to AT&T Wireless (nyse: AWE - news - people ), T-Mobile, Cingular and Virgin Mobile, as well as handset makers Nokia (nyse: NOK - news - people ), Motorola (nyse: MOT - news - people ) and Samsung. Once its licensing team secures the rights to a song from the music publisher, as well as from the artist if the ring tone will feature a vocal performance, Moviso's developers format the song into two dozen digital formats, allowing the ring tone to be played on one of the 300 handsets that accept ring tone downloads. The retail price of the ring tone gets split between the carrier, the ring tone vendor and the owner of the music copyright, with the carrier getting about half.

A host of shoestring Web sites also sells ring tones in a commando fashion, without cutting into their profits by involving the carriers. They take advantage of a back door into the wireless networks, using text messaging with a link to the ring tone embedded inside. Ring tones purchased from these sites may or may not be legally licensed, creating a quasi-Napster for phones.

Because of the copyright-infringement possibilities, record labels and independent artists were initially reluctant to allow their music to be turned into ring tones. But as ring tones' potential to help promote new music becomes apparent, the labels are signing deals.

Moviso now runs ring tone-download stores online for the Bertelsmann record unit BMG and Vivendi's (nyse: V - news - people ) Universal Music, and plans to roll out agreements with all five major record companies this year. Even artists like U2, who originally scorned ring tones, are now popular downloads.

For the hip-hop world, a cell phone is now just another way to give a shout-out to your favorite rapper. And the rappers are happy, too, since they're making money.