Mobile ringtones sound Web alert

"The A-Team." "Mission Impossible." "Jaws." "Top Gun." Such is the craze for downloading musical ringtones to mobile phones, it has become a massive new global e-business.

But many of the firms offering a galaxy of movie, TV and top 20 ringtones on the web are paying no copyright fees to the music companies and some in the industry are warning that this could become "a new Napster."
Brian Earle, CEO of Envisional, a UK-based Internet monitoring company, says that the growing business could soon be costing the music industry $1 million a day worldwide.

His organisation has identified unlicensed or suspected unlicensed sites across Europe including the UK, Holland and Finland -- plus one in South Africa which specifically targets British and Irish users.

"There are some Web sites who estimate they are selling 15,000 a month of a single ringtone -- Mission Impossible -- but they are not paying any royalties," he told CNN's Becky Anderson.

Earle warned that the music industry and ISPs were ready to take action in line with the legal challenge to Napster on Web downloading.
"The net is something of a wild west but the music industry will take action against these and many similar companies," he said.

The market is dominated by teenagers downloading their favourite artists -- Eminem, Limp Bizkit, Destiny's Child and S Club 7 -- and thirtysomethings copying hits from the 1980s.

But there are specialist areas, for example hits from Indian "Bollywood" movies -- and those who like to change to seasonal themes at Christmas.
Bizarrely as well as "The Flintstones," "Dallas" and "Ghostbusters" there are quirky little numbers like from Britain, the BBC rural soap, "The Archers."
A South African site offers "Ag Pleez Daddy," "Jan Pierewit" and the somewhat less local "Irish Washer Woman Song."

A Finnish site meanwhile offers "The Theme of Eurovision," "A Signal of the Finnish Defence Forces" and The Anthem of the Finnish Students of Technology."

British intellectual copyright lawyer Clare Griffiths said: "Copyright in the music will be infringed by taking a 'substantial part' of a musical work. The most recognisable melody of a song, even if it is only 10 seconds out of three minutes, could be substantial copying."

She added: "The moral rights of a songwriter may also be infringed through the derogatory treatment of their work -- having a beautiful melody reduced to a ringtone could be seen as damaging to the integrity of the music."

She also warned that not only the companies offering the music but the downloaders themselves may be legally liable as they were creating a copy on their phones.

"Also, is the song being broadcast or performed when the phone rings, especially in a public place, further infringing the rights of the copyright owner?"

Typical charges for a download are $1.50 to $3.50 (£1 - £2.50) and yet the royalty payments required are small by comparison -- five percent, typically 7.5 cents (5p).
"I don't think the amount is a problem for them," said Earle. "But with the global reach of the Internet, copyright owners can no longer control the distribution."

He pointed to e- books being a parallel area with the latest Harry Potter book being available in its entirety on the web on the same day it was published.

He said that the industry was trying to tackle the issue by trying to protect intellectual property at the beginning of the cycle with watermarking and digital rights monitoring.

Edward P. Murphy, CEO of the U.S.-based National Music Publishers' Association, said the organisation had already received many enquiries from companies looking to get involved in the business.

He said the association was keen that the legal situation be understood before handsets have the ability to play full sound.
"The capabilities of these hand-held devices are going to change markedly within the next 24 months. A hand-held device will have the ability to play music.

"We are very excited and happy about this, but we have to think about the next step. We want to get the legal position sorted out before this happens."
He said issues of territory, tracking and auditing were all crucial. "The problem we are hearing and seeing is that most of the organisations we have met are not clear on their own business models, which makes things more difficult," he said.
Rhys Evans, a spokesman for the UK's Mechanical Copyright Protection Society, confirmed that the problem was serious with a substantial number of unlicensed sites and unfettered access to the Internet.

"We can only license web sites which fall within our British jurisdiction. The problem is that anyone has a free access over the Internet to an array of European and international sites."