Mobile TV has captured the industry’s imagination. Wireless users can already watch music videos, check out sports clips and–with the right hardware–view full-length Hollywood blockbusters on their phones. And technology companies are betting enormous sums on the application, spending hundreds of millions of dollars to build out dedicated multimedia networks for mobile operators and their subscribers.
For on-the-go video to gain mass-market traction, though, the wireless video industry and Hollywood will have to bridge a substantial divide.
The disconnect between the two businesses was evident last week during the seminar “Hollywood in the Mobile World” at CTIA Wireless I.T. & Entertainment 2006. The event–sponsored by RCR Wireless News and its sister publication, TelevisionWeek–featured a panel of TV executives and a roomful of wireless executives struggling to find common ground.
Carriers increasingly are looking to mobile video to boost revenues and create stickiness with their subscribers, and the TV industry is hoping to oblige. The Fox network has gained followers with its made-for-mobile versions of the hits “24” and “Prison Break” programs, and has aggressively worked with Toyota Motor Corp. to offer advertising-subsidized video. MTV Networks is using both repurposed and mobile-exclusive content from its franchises to extend its reach to the key demographic of teens and young adults. And “Access Hollywood” offers content to star-struck wireless users through several carriers as well as mobile virtual network operator Amp’d Mobile Inc.
“In the past, it’s always been, `Hey guys, can’t you just slap something together” for wireless users, said Thom Beers, chief executive officer of Original Productions. “Now, (TV networks) are actually spending the time and money to make specific mobisodes that are complementary to the TV channel. All of us are starting to realize more and more that (wireless) is an important part of the new paradigm.”
Exactly what part mobile will play, though–and who will pay for it–is far from clear. Some TV studios are looking to use mobile phones simply as a branding platform, pushing only enough content to lure users back to the couch to view this week’s episode of the hot new sitcom on their home screens. Carriers, on the other hand, hope to monetize stand-alone offerings through subscriptions, advertising revenues or both.
And the contrast between the two types of content is more than a distinction without a difference. Promotional materials–regardless of the technological platform–are often included in the contracts of writers and actors, leaving the talent without extra pay for the overtime. Stand-alone content, on the other hand, can require entirely new agreements between studios and labor associations. To complicate matters further, much of the new, TV-related content coming to the Internet and mobile phones is designed to stand on its own as well as driving users to the TV screen, leaving the entertainment industry struggling to define terms: Is it promotional or is it original?
“I think the general consensus is, if it’s done right, it’s a little bit of both,” said Matt Michnovetz, a story editor for “24.” “It’s promotional, but it’s also creative-driven.”
The problem was underscored earlier this year when Touchstone Television was forced to shelve production of mobile versions of the ABC hit “Lost.” The project was stalled for months until the Walt Disney Co. subsidiary came to terms with the Screen Actors Guild, the Writers Guild of America and the Directors Guild of America, inking a deal that addressed content for the Internet and wireless phones.
The agreement–which was hailed as a first in the mobile-content sector–mirrors the standard revenue-share agreements that writers, directors and actors receive for TV shows and other media.
“There are compensation issues, there are guild issues, there are issues with credit. At the moment, it’s sort of at an impasse,” said Ronald D. Moore, executive producer of “Battlestar Galactica.” “It’s a very big, fat gray area.”
Whether demand for mobile video will help pay the bill for content production is far from clear, as well. A study released last week by Mercer Management Consulting indicates wireless executives believe mobile TV will increase ARPU by only $4.90 per month in the next three years, and one in four respondents think the application will result in no additional revenues. While ad-subsidized services are sure to play a major role in spurring uptake, the business models for such offerings are still very much in trial mode. Meanwhile, operators are pushing for as much mobile video as they can get, while the television industry is trying to determine how lucrative any sort of mobile video service could be.
“Everyone is screaming for content,” said Beers. “Nobody wants to pay for it, but everybody is screaming for content.”
Perhaps the biggest threat to the prospects for wireless television, however, is the platform itself. The small screen sizes and low-quality sound of most phones provide substantial hurdles for TV and film studios looking to leverage the third screen, and much doubt still exists as to whether users really want to watch video on their handsets.
There’s no doubt that familiar networks and programs such as CNN will be crucial in getting consumers to tune in on their handsets. But as established producers struggle with both the logistics and economics of shrinking content for the smallest of screens, it also seems clear that plenty of opportunity exists for unknown producers looking to create mobile-only content.
At least one TV producer won’t mind the competition.
“Most of us here started in TV, and we’re all aspiring to the big screen,” Beers told the wireless executives as he reached for a mobile phone. “It’s a visual world to us. And when you ask us to cram (our work) into something this size, it’s like, `What are you thinking?”‘
