To: John Biddle who wrote (33214 ) 3/7/2003 6:47:08 AM From: John Biddle Read Replies (1) | Respond to of 196673 Tiny US firm loads MP3 song files onto cellphones Thursday March 6, 7:50 pm ET By Sue Zeidler, Reuters biz.yahoo.com LOS ANGELES, March 6 (Reuters) - A tiny company called Xingtone on Thursday said it has developed technology to enable users to load digital songs onto cellphones for the first time, but admits the software may hit a sour note with the embattled music industry. The software converts MP3 files, or compressed digital music files, onto wireless phones, which would take the current ring-tone phenomenon one step beyond providing the robotic sounding renditions of tunes currently playing on phones. Selling ring-tones, or musical jingles on cellphones, is giving the music industry, entrenched in a prolonged sales slump, a little boost as it struggles amid a booming black market for illegal online file-swapping. And with the ring-tone market expanding, many companies are now expanding into polyphonic ring-tones -- which consist of more than just one note -- as well as preparing for the time when actual songs can be played on the cellphones. Some of the world's biggest music labels, like EMI Group Plc (London:EMI.L - News) have already licensed master recordings to wireless operators across Europe and Asia, which are expected to roll out in services on new handsets expected to be available by consumers this spring. But Xingtone, which employs eight people in Los Angeles, Atlanta and Amsterdam, said it has already gone live with its service that enables users to take an audio clip of a recording they own, load it through the conversion filter and deliver it to their phone. "It's a simple choice, do people want their phone to sound like an old arcade game or a radio playing their favorite songs?" said Brad Zutaut, who currently has a clip of the Rolling Stones' hit "Get off of My Cloud," on his phone. ANOTHER FORM OF PIRACY? Some recording executives said Xingtone's service, offered without any licensing from the labels, appeared to be encouraging yet another form of digital piracy. "It's much easier for them to license the content and sell it legitimately, than to encourage thievery," said Jay Samit, president of digital distribution for EMI Recorded Music. Zutaut said 3,000 people have already used the service, launched a few weeks ago at (http://www.xingtone.com). The service will be demonstrated publicly for the first time on Thursday night in Los Angeles at an event hosted by a wireless networking group called Unwired. The company said phones made by Sanyo and Samsung on the Sprint PCS Group (NYSE:PCS - News) network already enable users to add MP3 songs to handset and that other carriers and phones are in the process of being added to the service. Currently, wireless carriers limit clips to 30 seconds, but as soon as carriers open this restriction, Xingtone said it has the capability to send entire songs to cellphones. Additionally, Zutaut said users are able to send their audio clips from the Web site to their friends' phones. "If I know your phone number, I could go to the Xingtone Web site and send an audio file from that Web site to that phone number," he said, adding, "We're being very free and open with our sign-up process." Zutaut said that while he has only spoken to one record label, he hopes others will embrace this as an opportunity. But he also admitted he ran the risk of angering the labels, which have gone after many Internet services like Napster and Kazaa that enabled users to swap their copyrighted material without their permission or financial gain. "I know that we'll have licensing issues but if people take their own music and put it on their phone, it's not my responsibility," he said. Zutaut said he sees potential revenue streams from eventually charging people to use the service and co-branding.