are 15-second snippets from popular songs sold for about $1 each to replace a cell phone's pre-packaged ringer. While popular overseas, the market in the United States has seen little demand. Cingular Wireless introduced the nation's first ring-tone service in June, and four other U.S. carriers offer download services.
Industry analysts The Yankee Group found that less than 100,000 people in the United States use their cell phones to engage in commerce, such as downloading a ring tone. The market might be small, but so is Verizon's risk, according to Verizon Wireless spokesman Jeffrey Nelson. The company isn't spending very much cash on the ring-tone offer, Nelson said.
Instead it has reached an agreement with wireless software maker Moviso, in which Moviso will do a majority of the work, including assuming most of the financial costs of licensing the music for use as a ring tone. Moviso will also manage and host Verizon's download service. For its work, Moviso gets a bigger split of the profits. The exact terms of the deal were not disclosed.
"One of the great things for us is that you don't need to sell a lot to make money," Nelson said.
Moviso President Shawn Conahan said Wednesday that analyst projections of less than 5 million ring tones sold in the United States this year are too conservative. Instead, he says that North American wireless customers download a million ring tones from various companies every month. Moviso powers the ring-tone businesses for Verizon Wireless and four other major carriers, including Cingular Wireless and VoiceStream Wireless, which will change its name to T-Mobile this summer.
"All they (the analysts) have to do is look at my server logs to see," Conahan said.
Moviso is part of Vivendi Universal Net USA, which is the North American arm of VUNet, Vivendi Universal's Paris-based Internet and technology unit. Vivendi is among the world's biggest music publishers as well, and the company has licensed some of its artists' songs for release through Moviso.
For now, Verizon Wireless ring tones are available only in San Diego, where phones that use a new operating system fromare being tested. Verizon intends to launch the new service nationally later this month.
Verizon Wireless said the phones will be the first in the United States to use an operating system known as Binary Runtime Environment for Wireless (BREW). BREW, created by Qualcomm, allows a phone to download software, such as a ring tone, over the air.
It's also Qualcomm's answer to Sun Microsystems' software language,, which phone makers like Nokia and Motorola have been putting in phones for more than a year and which also allows for software downloads.