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According to 'Envisional,' the current craze has created intellectual property abuses that have the potential to cost the music industry as much as USD1 million per day.
The company has identified approximately 1400 Internet sites that make ring-tones available for download to mobile phones. While most sites charge users for each tone they download, Envisional says that industry analysts investigating the ring-tone phenomenon say that very few of the companies ever return any royalties to the record companies who own the copyright to the tunes.
"It's an infringement of copyright. Companies are making money on other people's intellectual property, so why on earth are they not giving money back?" Iain Frazer-Halpin, spokesperson for Envisional told ElectricNews.Net, "We know the music industry has been hit very badly by this and they deserve to make some money back."
Envisional, which has worked in the past with the International Federation of Phonographic Institutes (IFPI) in identifying and cracking down on file swapping sites, has described the problem as 'another Napster in the making.'
Its research found that teenagers downloading tunes from their favourite artists, which include Eminem, Limp Bizkit and Destiny's Child onto their phones, largely created the problem. People in their thirties, according to Envisional, also use the ring-tone sites to download music from the 1980's that downloading specialist and seasonal tunes has also become popular.
Envisonal says it is hard to predict whether the problem will escalate to the extent that record companies will take legal steps against the ring-tone companies, or whether the companies in question will 'play ball' and co-operate.
"It is hard to predict what will happen in the future, but these sites are clearly making huge amounts of money. Royalty only costs seven and a half cents per song, which is a very small total of their overall income," Frazer-Halpin said.
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