As the wireless music market evolves in the United States, deal-making abounds among labels, handset makers, cell phone companies and entertainment companies targeting the space.

NEW YORK--As the wireless music market evolves in the United States, deal-making abounds among labels, handset makers, cell phone companies and entertainment companies targeting the space.

Deals over the next year will center around licensing agreements that will enable carriers to sell mastertones (ring tones that use actual songs instead of simulations) either directly to consumers or through third-party distributors.

The bulk of ringtones currently sold in the U.S. are by carriers such as Sprint, Verizon, T-Mobile, Vigin Mobile USA, and AT&T/Cingular.

In January, Universal Music Group and Warner Music Group became the latest players in Sprint PCS Vision's expanding mastertone business, through a service called Music Tones. Under the deal, UMG and WMG make select songs available for downloadable purchase.

Music Tones has been available through Sony since last July. UMG songs debuted in January, and WMG songs are expected to debut later this year.

WMG tunes that will become available as mastertones include songs from Green Day, Seal Jet, Jason Mraz, Sonny & Cher, the Spinners, Yes, Grandmaster Flash and Bobby Darin.

UMG's Music Tones include music from Sheryl Crow, Sting, Hoobastank, Black Eyed Peas, Smash Mouth and Andrew W.K.

This effort is merely the "tip of the iceberg," says David Ring, VP of business affairs at UMG e-Labs. "It's the first of many such deals we will be doing with wireless companies."

BLAZING TRAILS
And Sprint's not the only one getting into the mastertone act.

BMG recently agreed to a licensing deal with Zingy, a New York-based provider of ringtones and wireless services, under which it will distribute BMG master recordings for use as ringtones.

Among the songs available in the deal are tunes from Justin Timberlake, OutKast and Sarah McLachlan. The deal involves BMG's catalog as well.

Zingy customers can download the recordings directly through their mobile devices or via computer. Zingy will also develop a series of mobile promotions to support BMG releases.

The ringtones will be available through Zingy's distribution network, which includes Microsoft's MSN, AOL and MTV. Customers can browse and download the context through their mobile device or computer.

TARGETING IMPULSE BUYS
Elsewhere, other companies are focusing on future applications. Handset makers like Nokia will roll out phones that will take music applications beyond ringtones.

The company is developing a feature called "visual radio" that allows a handset to receive FM radio signals and matches the audio content with related pictures, graphics and other content.

"What we're bringing to the table with visual radio is impulse buying," says Reidar Wasenius, a senior project manager with Nokia's Nokia Multimedia group. "You happen to hear something in a certain mood and the radio station offers you the purchase opportunity. You do it there and then."

Elsewhere, Berkeley, Calif.-based Idetic has launched a service that enables Sprint cellular subscribers to watch live TV, including three music video channels, through their mobile phones.

The company also is already working on an e-commerce solution that will enable viewers tuned in to the music video channels to buy the video, ring tones or music from streamed videos, says Dr. Phillip Alvelda, CEO of Idetic.