Friction is growing between wireless executives and their Hollywood counterparts as both begin to experiment with mobile entertainment. One of the few points people from the telecom and television industries can agree on is that no one has yet discovered the best way to capitalize on the opportunities for wireless content.
“The battle between the phone companies and Hollywood” is in full swing, said Kanishka Agarwal, VP of mobile media at Telephia Inc. Many entertainment powerhouses find themselves dealing directly with wireless carriers for the first time. Wireless carriers and entertainment companies are both used to being the 800-pound gorilla in any room. Now that they’re finding themselves in the same room, something has to give, Agarwal said.
“Carriers are trying very hard to not just be a transport carrier, they are trying to become entertainment companies,” he said. “Now they are actually trying to bring people in from the entertainment world.”
The problem isn’t so much a lack of innovation in content, Agarwal said, but rather the absence of creative business models-an approach that would allow both industries to continue to operate as 800-pound gorillas with enough bananas for both to take home, Agarwal added.
“The current box that we are in,” Agarwal explained, is too simple of a formula. “If the consumer is going to pay x, what percentage of x does the carrier get and what percentage does the entertainment company get?”
Once business models move beyond that framework and enable greater collaboration, creative talent will flood into the mobile content space, he said. “I think the business model isn’t clear so everybody is walking on eggshells, tip-toeing and making sure they don’t do too much,” Agarwal said. “It’s a tough decision for the carrier. . The carriers have the direct relationship with the consumer and they have a business model right now that works.”
Dissenting opinions
Cyriac Roeding, executive VP of CBS Mobile, disagrees. “I think the business is already here. Mobile video and mobile television is a pretty substantial business already,” he said.
“Nobody’s really gotten it right yet,” said Levi Shapiro, director of audience metrics at Telephia.
That sentiment runs deep, it appears.
“I think carriers hire who they are familiar with, and carriers are not familiar with entertainment,” said Seth Cummings, former senior VP of content at bankrupt mobile virtual network operator Amp’d Mobile Inc.
Cummings is poised to play a major new role in mobile content following Clearwire Corp.’s plan to bring Amp’d Mobile’s 50-plus member content team on board to lead a new entertainment offering under the Clearwire brand.
Cummings said innovation in content is largely stunted by three factors: carriers’ unwillingness to allow adult-oriented content on their decks; difficulty in matching new content offerings with content “road maps” led indirectly by marketing teams; and an extremely slow time-to-market approach to new entertainment and programming.
“Carriers and their ad agencies seem to struggle with how to position and market content, always leaning back in the safety zone of rate plans, network quality, coverage, and handsets,” he wrote in response to questions from RCR Wireless News.
“Content is always touted as a future [average revenue per user] driver with carriers, but carriers need to undergo a fundamental and dramatic culture change in respect to content to have this truly realized. Content is essentially relegated to a bullet point in the list of features carrier customers sign up for,” Cummings added.
“At Amp’d, we were big believers in starting with a blank slate, creating made-for-the-medium experiences, targeting early adopters of digital, and really owning a new genre of programming. We saw that consumers care less about network brands and more about shows and ancillary content around shows. We also saw the other end of the digital experience spectrum defining itself with user-submitted content on sites like Break and YouTube. We felt the sweet spot to own was right in the middle,” he continued.
“A single brand can’t be everything to everyone. So unless you segment through an integration of brand, marketing, and programming, I don’t see any customer segment holding up their mobile TV and saying ‘This is changing my life!'” Cummings said. “For me, it’s all about segmenting your audience, and developing unique made-for-the-medium programming within reasonable and less restrictive content standards. Carriers gate anything other than G rated, so how can mobile ever become a true competitor or complement to the Internet, television or film? Everyone talks about screen size being a limiting factor, but if content is high quality, unique and compelling it will gain an audience (and sell) on any screen size.”
Size does not matter
Roeding, of CBS Mobile, stands out as a TV network executive who heeds the call to think differently when it comes to the mobile screen.
“We believe that the cellphone is not a small TV screen. And whoever doesn’t see that difference is likely to miss out on a lot of opportunities. It’s not a small TV screen and it’s also not a small Internet screen,” he said. “This is not just another outlet, this is a new medium. Those who see this as a new platform and connect it with the other platforms will win.”
Roeding also thinks the wireless, entertainment and technology industries could benefit from more confluence.
“The positioning of CBS Mobile is ideally to be one of the innovation leaders in the industry and to push the envelope whenever necessary. This market should see innovation and we want to push the boundaries and ideally help to build this landscape,” he said.
It’s because of this that Roeding finds himself spending more time in Silicon Valley. “We love startup companies because we believe the combination of Hollywood and Silicon Valley is going to provide the next generation of innovation,” he said.
