Lords of the Ring-a-Lings
By Rob Shapard

Just about a year ago touring rock musician Chris Dunn was in the back of a battered van driving down a wind-swept Wyoming highway when he realized the time had finally come to get a day job. His band's album wasn't selling, and he figured his dreams of making a living from music were over. Then he discovered one of the hottest sectors of the music business today: cell phones. Dunn, 30, now spends his days translating top 40 hits and television themes into beeping musical snippets that announce incoming calls on a cell phone. Modtones, the Japanese-owned company he works for, is one of several that have sprung up in the past year to meet the growing demand for alternatives to the factory-installed electronic chirps that are standard on most wireless phones. Of course, it's a long way from performing in front of live audiences, but Dunn's new career has its moments. "I was in a mall the other day and I heard [the theme to] "Batman," Dunn recalled. "I wanted to say, 'Hey, I did that.' " Ring tones have become big business in the past year, especially in Europe and Japan, where consumers spent about $1 billion to have their phones ring with shrill electronic versions of their favorite tunes. In Japan, an average of 80 million new ring tones are ordered every month, as fans constantly seek out new songs. Europe averages 60 million, according to Anthony Stonefield, chief strategy officer for Moviso LLC, which with Modtones is one of the two major providers of ring tones in the United States. Cell phone subscribers can purchase new ring tones in two ways: over the Internet or via cell phone. In either case, the new ring is sent to the cell phone over a wireless network and the fee is applied to the next monthly cell phone bill. Fees are divided among the ring tone providers, cell phone companies and the music labels that control the copyrights to the songs. But the music industry recently has begun demanding a bigger share, arguing that the time spent downloading ring tones boosts demand for the nation's wireless networks and overall revenue for cell phone companies. Thousands of ring tones are available from dozens of companies. Consumers can pick hits from almost any decade and any musical genre, from classical to hip-hop. Most ring tone companies keep their own list of top 10 hits. Approximately 50 percent of Europeans under the age of 30 have downloaded ring tones, according to Stonefield, who believes the U.S. market is ripe for similar growth. "There is no way that kind of distribution is going to be held back; it is a real social trend," he said. The United States is catching up thanks to the introduction of new phones that allow consumers to swap out their old ring tones for new ones. Moviso counted 79,000 downloads in January. In December the number of downloads has already passed 1.5 million. Moviso is a wholly owned subsidiary of Vivendi Universal SA, the entertainment industry conglomerate. "This is huge," said Jay A. Samit, senior vice president for new media at music label EMI Group PLC. "This is the largest growth area for music companies and our artists." Samit wouldn't reveal how much his company is earning from ring tones but said they are projected to account for 10 percent of the recording industry's earnings in coming years. Last year the industry reported $33 billion in earnings worldwide, meaning ring tones might eventually be worth more than $3.3 billion. But for Samit and the rest of the music industry, the most important feature of the new technology is that a fee is automatically added to the monthly cell phone bill every time a ring tone is downloaded. It's a critical development for an industry that has been severely scalded by the ability of millions of people around the world to download songs over the Internet without paying for them. "It's finally easier to buy music than to steal it," Samit said. As mobile phones become increasingly sophisticated, ring tones are just one of several new products the industry is pushing on consumers. The most advanced cell phones have color screens and allow people to play arcade-like games and display photos. But ring tones remain the most downloaded application, according to John Johnson, a spokesman for Verizon Wireless Inc. Most customers spend $9.99 on a package of 10 ring tones, Johnson said. Ring tone technology first emerged in Europe two years ago, where it got a big boost from the phone-sex industry, according to Moviso's Stonefield. The sex-chat companies realized that the same process they used to bill customers for their naughty conversations could be used to bill for ring tones. They began to market cell phone jingles aggressively in newspapers and on radio, competing for customers in the same way they do in their main line of business. The traditional telephone companies noticed the emerging market and finally jumped in themselves during the past year. Not all cell phones can play downloaded ring tones. But the latest phones offer a more advanced "polyphonic sound" that is much richer than the one-note trills offered by most phones in the U.S. market. Industry officials believe phones eventually will be capable of playing full digital copies of songs. For now, though, it's up to people like Dunn to come up with an approximation of the new thing. After seven months at Modtones, he is grateful to have a job in the music business. But he has had a few rough moments since he gave up touring with his band, Red Planet. Perhaps the worst was when a CD for a band called the Riddlin' Kids crossed his desk. With a sinking feeling, he realized he was being asked to write a ring tone for a band that opened for Red Planet on its last tour. "I was pretty crushed," Dunn said