First in a series of occasional columns about the music industry.

One of the new portable music-playing gizmos Apple introduced a few weeks ago has the gleam of the future about it, and it’s not the iPod Nano–cute as that is. The important one is the Motorola ROKR, the first mobile phone compatible with iTunes.

Reportedly it’s not very impressive: it can’t hold more than 100 songs, and its interface isn’t nearly as graceful as the iPod’s. But it doesn’t matter. The ROKR is designed for people who want to be ahead of the game, and the iPod phone is the next significant step toward the Little Pocket Gizmo That Does Everything: the cell phone/camera/audio player/PDA/wireless Internet device/GPS receiver/movie viewer. Every industry the LPGTDE touches will experience a major shake-up, and the ROKR is a guarantee that it will touch the music industry. Now that somebody’s combined a communications widget with a music-playing widget, it’s only a matter of time before cell phones will be able to send and receive songs as easily as they now send and receive photos.

Understandably, this gives big music companies the screaming heebie-jeebies. Until now the only interaction labels had with cell phones was in the hugely profitable ringtone business. At two to three dollars apiece, ringtones will produce half a billion dollars in sales in the U.S. alone this year, according to BMI–double the 2004 figure. Thomas Hesse, president of global digital business for Sony BMG Music Entertainment, recently told Business 2.0 that “we’ve generated as much revenue from ringtones as from all other digital music combined.”

Why does a 30-second, low-fidelity ringtone cost two or three times as much as a high-quality full-length song download on iTunes? Maybe because it’s a status item. If you’re willing to pay that much, you probably want to broadcast your taste to anyone within earshot. Record labels get that, which is why they’ve begun using ringtones as promotional tools.

One of Sony BMG’s biggest phone stars is Philadelphia rapper Cassidy, whose single “I’m a Hustla” has sold more than half a million copies as a ringtone, slashed down to a single line–“I’m a hustla, I could sell salt to a slug”–and its scratch-and-stutter chorus, which repeats the title 12 more times. (Sony also sells other Cassidy sound bites for phones: “Yeah yeah, this is Cassidy the hustla. If you a hustla you gotta check your text messages.”) The success of the “I’m a Hustla” ringtone helped Cassidy’s second album, I’m a Hustla (Full Surface/J), debut at number five on the Billboard album chart in June. Subsequent efforts to promote Cassidy have stalled, though, mainly because he’s in jail, charged with first-degree murder in the shooting death of 22-year-old Desmond Hawkins in April.

It doesn’t help that the rest of I’m a Hustla is totally ignorable. Which speaks to another issue big labels are facing: having all but eradicated singles, they’re finding high-priced albums by new artists tough to sell. To address the problem, last month Warner Music Group announced that it’s setting up an “e-label” to sell downloads by emerging artists. Instead of albums, the new imprint will release a handful of tracks by each artist every few months; Warner Music Group head Edgar Bronfman Jr. described it as a new way to “work with artists and help them hone their craft” in his announcement. Realistically, it means the label will likely use digital-sales data to decide what acts are worth releasing on actual CDs.

What could be more revolutionary than taking the physical product out of the sales equation? How about taking the label out of the sales equation? The New York-Philadelphia band Clap Your Hands Say Yeah is currently touring in support of its self-titled debut album, a surprise underground hit that’s sold more than 25,000 copies since July. (They played a sold-out show at Schubas last week.) The surprise is that the album isn’t on any label: CYHSY has been selling it directly to fans, retailers, and the 70-store Coalition of Independent Music Stores.

Clap Your Hands Say Yeah initially caught on mostly because of a rave review that appeared on Pitchfork in late June. The reviewer, Brian Howe, noted that the band had managed to present itself “without any sort of press campaign or other built-in mythology . . . without a PR agency or a label.” Of course, as soon as Pitchfork published that, it became the band’s “built-in mythology.” CYHSY is arguably the first rock band whose record became a significant success without the benefit of either a tour or the label system as we know it.

That makes Clap Your Hands Say Yeah signify something more than what it is (a solid indie-rock album that owes an inestimable debt to early Talking Heads, especially in Alec Ounsworth’s vocal tics). It’s another harbinger of the way idealistic listeners hope the music industry will work in the future: artists connecting more directly with their audience, trusted intermediaries spreading the word about notable new artists, and no interference from the big-money promotional machine.

It appears that Clap Your Hands Say Yeah is as independent as it’s claimed to be–though the band’s manager, Nick Stern, is a publicist at Atlantic Records and they’re reportedly being pursued by more than a few labels. (As of mid-September, they’re being distributed by the Warner-affiliated Alternative Distribution Alliance.) It can’t be long until some canny major label figures out that the best way to market a new band is to give the impression that it’s selling a self-funded CD out of its living room. “Fake no label” will be to the late 00s what “fake indie label” was to the early 90s. In the meantime, listening to CYHSY on a ROKR phone is surely somebody’s idea of a prestige move, and CYHSY ringtones can’t be far behind.

Art accompanying story in printed newspaper (not available in this archive): photo/Jasper Coolidge.