Labels Come Courting Flashback to a few years ago when customized music ringtones were a newfangled idea and record labels were more than a little wary of this technology. Ztango, an early entrant in the ringtone arena, says that negotiating copyright protection for ringtones today is a much simpler process than it was a few years ago. "Three years ago, we had to beg for new content approvals for ringtones," says Adrian McAloon, marketing director at Ztango. "Now it flows the other way. Copyright players now push us the songs.

It's a big change. "Along with the music industry's growing respect for the revenue-potential of the mobile phone distribution model comes a much more streamlined process for securing those copyrights. "We find that content partners are simplifying the process because they see wireless as a valuable distribution model and they want to be part of it," says Vern Poyner, CEO of Ztango. "The contracts are still complicated, but it's easier for us to do it."

Record companies may be making contracts and content easier to obtain, but turning the latest hit song into a ringtone remains a complicated process. According to Anthony Stonefield, vice president and chief strategy officer at InfoSpace Mobile, which last year purchased ringtone and mobile music firm Moviso, some record companies allow companies such as InfoSpace to master the songs for cellular phones while others want to do it themselves. "There's a fair amount of work we have to do. And when we do format and master the music, we have to send it back to the record company for approval," Stonefield says.