SHIFT: Why are we paying phone companies billions for ringtones?

My cellphone just died, catastrophically. My first clue: The display on the LCD was upside-down and backwards. I didn't even think that was even possible, but, yup, that's what it was doing. A quick trip to the AT&T store, and cute new phone was in hand. I was able to transfer my numbers, but my downloaded ringtones died with the old phone.

Ringtones, a market that didn't exist 10 years ago, have become a revenue stream for cellphone providers that they cling onto with unparalleled ferocity. After my I got my new phone, I quickly became immersed in the lucrative and oddly controversial world of ringtones. Keep reading to see why ringtones have become big business, and how you can beat the system.

Ringtones: The Beginning
First, a little history. When cellphones phones first came out they had a few options for customizing your phone, none of them particularly interesting. As mastertones became possible (snippets of real recordings, as opposed to songs synthesized within the phone) a huge marketplace opened up. Now ringtones are big business. Reports from a few years ago said the ringtone industry earns more than $5 billion a year.

Search for ringtones online and you'll find an amazing, overwhelming selection. You can get mosquito tones that only younger people can hear. You can get a ringtone that only your dog will hear. (Seriously, what good is that?) You can set ringtones to specific callers so you know exactly who is calling. Beethoven for your mom, Pussycat Dolls for your girlfriend, and the theme from Monday Night Football for your best bud. Fun stuff.

How They Get You
Once I got my new phone, a Nokia 6085, it was time to start shopping for ringtones. It starts innocently enough. You can search from seemingly thousands of websites. Most try to get you to subscribe to a ringtone service. Do you really need to change the tones that often? Apparently we're truly a short attention span society, since there are so many of these companies.

Not wanting to get scammed, I just went to AT&T's ringtone website. It had hundreds of options, and it was oh-so simple to click and shop. There were a few free downloads, but most were $2.49 for the 20-30 second clip. After auditioning the clips, my choices were automatically sent to my phone with just a few painless clicks. Doesn't get easier? But a few minutes later I realized that in those few short minutes, I had grabbed $15 worth of ringtones, automatically billed to my phone. I get a phone call about every two or three days. I'll never even get to use them.

Now, at $2.49 a pop, I got to wondering — why are these so expensive? Some of my picks are songs that I've already purchased and downloaded for 99 cents from iTunes, or 89 cents from Amazon. Why am I paying so much for a shorter, most likely lower-quality version?

Even after paying a premium for the ringtones, plus the airtime to shop for and download it to your phone, some carriers don't even let you keep them forever. Yes, your ringtones can expire. So, you're paying up to three times as much for a 30-second clip of a song, and you don't even get to keep it.

Why Can't I Use iTunes Songs as Ringtones?
Simply put, unless you have an iPhone, it's a no-go. Weird, I know. If you are one of the chosen phone owners, it's still not as simple as sending a tune to the phone. If your song is available as a ringtone (it will have a little bell icon) you still pay the 99 cents to download, but here's the rub. You have to pay another 99 cents to retag it as a ringtone. The good news is that you can use an edit program to pick the portion of the song you want to use.

The reason why we all have to pay so much for ringtones has to do, as always, with copyrights and royalties. When you download a song, you pay 9 cents in royalties. However, a recent ruling bumped the royalty for ringtones up to 24 cents per song.

The Backdoor to Free Ringtones
There's a backdoor, however, that lets you avoid paying any fees. You can create a mastertone ringtone from a CD that you've ripped, but you'll need a software program to put it in the proper format. It's really not that hard and easy enough to find the software online.

Even though there are simple workarounds to getting free ringtones, the providers are still making a killing on them. A lot of people ask why the phone companies charge so much for them. The answer is obvious: because they can. The real question is: Why are we all willing to pay so much?