Being the new kid on the block is always a challenge. Besides trying to keep your own sense of identity, there is the pressure of trying to fit in to an unnatural surrounding that may or may not receive you graciously.
A few years ago, wireless portals were new on the scene. While the wired Internet was exploding with innovations, the wireless Internet was seen as an outsider with limited potential as an auxiliary outlet for more conventional wired Internet sites.
Two of the heavy hitters in the conventional Internet market, and Atlanta-based neighbors, CNN.com and the Weather Channels’ Weather.com, saw the wireless space as more than a side service for their online offerings. They saw wireless as a way of getting information to people when they needed it.
“We felt that wireless was an important area for us, and operators needed content to push their new wireless Internet services,” said Mitch Lazar, vice president of business development and new media for Turner Broadcasting System Europe Ltd.
Lazar helped launch CNN Mobile in February 1999, directing development of the project and managing partnerships with nine charter GSM operators in Europe and Asia Pacific.
Those nine original members have expanded to 24 operators in 20 countries with 69 million subscribers, including Australia’s Telstra and Optus, BellSouth and Sprint PCS in the United States, Telefonica in Spain and NTT DoCoMo in Japan.
CNN Mobile was also the first value-added service to be built using WAP technology, which was launched commercially with Sonera in August of last year. And no one could question CNN’s brand name has credibility when it comes to providing news services.
In return for providing the name recognition needed by carriers trying to push their early wireless Internet offerings, the content providers were able to grow and build the wireless Internet models they would use, and would have free rein on the screens of wireless devices.
“When we started out with Sprint, we were all experimenting with how the content should look, how people would navigate it,” said Thomas Flournoy, director of wireless business development for Weather.com. “We established a partnership and an agreement on how we were going to work with this new technology. Nobody had any idea how they were going to make money or how far it would go.”
But being the first is only important if you can remain on top. As the wireless Internet has grown, so has the number of companies providing content to operators. Companies like CNN Mobile and Weather.com have been forced to not only rely on the content they provide, but on their well-established brand names to keep their early advantages afloat in a sea of similar services.
“There is definitely more competition in the wireless content market today,” Flournoy noted. “But the Weather Channel stands for something in people’s minds. It stands for reliability and trust when it comes to weather forecasting. Companies that have a direct customer relationship, like carriers, can bring more recognition to their services if they bring a recognizable face to their service. Why get just a weather report, when you can get a Weather Channel weather report.”
Staying on top of the market-and on top of wireless screens-has become harder due to recent carrier deals with content providers, including America Online Inc.’s reported $50 million payment to Sprint PCS to get its wireless Web link at the top of Sprint’s customers’ wireless Web devices. These deals hint at the changes coming to the wireless content market.
Lazar admitted that CNN was not in the business of paying providers to display its content, but noted that the key challenge for content providers as the wireless market matures was how they could be properly compensated for the content they provide.
“Operators have to provide a variety of choices and they have to let the consumer choose what they want to see, because at the end of the day, it is the consumer that makes the ultimate decision on what ends up on the operator’s network,” said Lazar. “The market has changed from when CNN was compensated for providing content to operators, to more of an Internet model where we are compensated with advertising revenue-sharing agreements or sharing of call charges with the carriers.
“People think that if the information is free on the Internet, it should be free on their mobile devices as well, and that is not necessarily true,” Lazar added. “When they dial up their wireless Internet service, they are being charged, and until that model changes to an Internet model, where we can find another source of revenue, we are not going to just give our service away.”
While Flournoy would not elaborate on the financial details of Weather.com’s selection as one of the premier providers to AT&T’s PocketNet wireless Internet service, he did acknowledge the tightrope carriers have to walk when it comes to providing screen space to content providers.
“Service providers need to be careful, and have been careful, about what content they provide on their services,” Flournoy commented.
“There are content providers who have deep enough pockets to buy those prime spots on wireless screen devices.”
