Just as the music industry has started to see the potential cash cow that ringtones can be, Xingtone, a software that lets anyone compose unique ringtones for free, is revolutionizing the whole picture.

The $15 sold online software allows users to take an MP3 file or CD track, trim it to create a 30-second ringtone and send it to the phone just like an SMS.

But record labels fear that people might concoct ringtones out of pirated songs and thus exacerbate the file-sharing problem and deprive the music industry of a new source of revenue.

However, not every company looks unhappy about Xingtone. Walt Disney’s music label, Hollywood Records, teamed up with Xingtone to distribute ringtone songs from its artists. And Artemis Records started giving out a free copy of the software with every copy of Sugarcult’s new album, to make it easier for fans to convert favorite songs to ringtones. The record company believe it can be a way to turn fan’s phone into a mini-radio station, introducing passersby to the album.’

Then there are mobile operators. They have ground to complain too since they play a central role in the distribution of the musical content and take a share of the profits. That’s why, some companies, such as Verizon Wireless, have taken steps to block songs they don’t sell. Sprint PCS has adopted a different approach, convinced that software like Xingtone stimulate demand for wireless data services.

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