WASHINGTON-Universal Studios is the latest mainstream media giant to go wireless in a big way, establishing a division dedicated to mobile content.
Universal, which already has more than 60 licensing deals worldwide with mobile entertainment publishers, announced plans to launch 30 games as well as images, video clips and voice ringers from its portfolio of film and television properties. The company tapped consumer products executive Jeremy Laws to oversee the business.
The division will focus on producing games and ringtones as well as licensing video clips from new films and classic Universal franchises.
“With the explosion of the mobile-data market, it demands the time of a concentrated team that can develop and manage our properties in this space,” said Beth Goss, executive vice president of Universal Studios Consumer Products Group. “Jeremy has been spearheading much of our mobile activity already and is masterfully suited to lead a much more aggressive pursuit for positioning Universal content within this important marketplace.”
On the same day Universal announced its new Universal Mobile Entertainment division, a representative held the wireless industry up before Congress as an example of how consumers want their information.
Demonstrating ringtones and ringbacks from various carriers, Michael Ostroff, general counsel & executive vice president of business & legal affairs for Universal Music Group, said one reason that the music industry is experiencing a comeback is due to partnerships with the mobile-phone industry.
“The mobile-phone industry understands the importance of musical personalization,” said Ostroff. “We are ready, willing and able to have partnerships. We can be as flexible as necessary to come up with partnerships.”
Ostroff appeared at a hearing of the House consumer-protection subcommittee on the consumer benefits of digital-rights management in the audio world. A similar hearing on video was held earlier this year.
Missing from the hearing was perhaps the greatest example of successful DRM within audio mobility-Apple Computer Inc. “Apple, which has a great story to tell, chose not to join us. This is disappointing,” said Rep. Cliff Stearns (R-Fla.), chairman of the House consumer-protection subcommittee.
With Apple absent to tell its story, attention turned to a new product recently launched by XM Satellite Radio Inc. The digital music players-Pioneer Electronics Inc.’s Inno and the Samsung Electronics Co. Ltd.’s Helix-allow users to record XM broadcasts and play back music as they please.
Legislators are grappling with the question of whether XM’s service is legally considered “performance”-like traditional radio broadcasts-or “distribution,” like Apple’s iTunes service. XM pays a performance royalty as defined by the Audio Home Recording Act for each downloaded song instead of a distribution royalty.
XM Chairman Gary Parsons was quick to point out the differences between his company’s new offerings and other portable digital music players. While users can move their own music files onto the player, they cannot transfer XM content off the device. And users can access recorded XM music as long as their subscriptions are current.
Rep. Mary Bono (R-Calif.), widow of 70’s songwriter/artist Sonny Bono, was passionate in her defense of the royalties.
“It is not stealing, but you are not referring it to multiple distribution. … You are saying it is a performance. I am saying it is distribution,” said Bono. “You paid Oprah and Major League Baseball to market your service and you can’t pay the songwriters. For my case, it is personal … I could not afford college if Sonny’s royalties weren’t paying for that.”
Rep. Tim Murphy (R-Pa.) pressed Parsons until he admitted XM only pays once even though a consumer can listen to a digital-quality song forever once it is downloaded.
XM’s main defense is that it does pay royalties.
“We are doing it right. We are following the laws that Congress designed to apply to XM and to our new generation portable personal products,” said Parsons. “We provide compensation to songwriters and music publishers both through performance rights and the AHRA. And, in addition to the AHRA payments on our devices, satellite radio pays more performance rights royalties to sound recording copyright owners and performing artists than any other industry.”
The music industry saw it differently. Ostroff compared Apple’s iPod, which pays a distribution royalty, to XM’s new music players. “Unlike an iPod, you don’t have to pay for the product you listen to,” he said.
