Friction is growing between Hollywood executives and their counterparts in the wireless world as both begin to experiment with mobile entertainment. One of the few points people from the television and telecom 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.
Many entertainment powerhouses find themselves dealing directly with wireless carriers for the first time. Both wireless carriers and entertainment companies are used to being the 800-pound gorilla in any room. Now that they’re in the same room, something has to give, Mr. 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, Mr. Agarwal said, but rather the absence of creative business models.
“The current box that we are in,” he explained, is too simple 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. “The business model isn’t clear, so everybody is walking on eggshells, tip-toeing and making sure they don’t do too much,” Mr. 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.”
Cyriac Roeding, executive VP of CBS Mobile, disagreed. “The business is already here. Mobile video and mobile TV 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.
“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.
Mr. Cummings is poised to play a major new role in mobile content following Clearwire Corp.’s plan to bring Amp’d Mobile’s content team of 50-plus on board to lead a new entertainment offering under the Clearwire brand.
Mr. 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 “roadmaps” 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 told 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,” Mr. Cummings added.
“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!’” he 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. … 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.”
Mr. Roeding, of CBS Mobile, stands out as a TV network exec who heeds the call to think differently when it comes to the mobile screen.
“We believe that the cell phone 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.”
Mr. Roeding also thinks the wireless, entertainment and technology industries could benefit from 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.”
It’s because of this that Mr. 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.