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New Moves Take Shackles Off of Mobile

Dec 9, 2007  •  Post A Comment

Mobile TV has been slow to take off because the mobile video experience for consumers is akin to the days of dial-up AOL in the mid-’90s, when users had to go through AOL’s “walled garden” to get online. Most cell phone providers offer similar proprietary environments on their phones, restricting user access to mobile equipment and content.
However, recent announcements by Verizon and Google could usher in an era of fresh innovation in the mobile business.
Late last month Verizon said it plans to introduce a new open-access program in 2008 for its wireless phones that will spur the development of new cellular features and services, including those for mobile video. Content providers and publishers are eager to start crafting those services to sell directly to consumers.
Under the program, Verizon will let phone customers buy any handset they want, provided it meets Verizon’s technical standards. That means consumers will no longer be restricted to the handsets Verizon chooses to work with. They’ll also be able to pick and choose the applications they want on a phone. Customers can still purchase traditional cell phone plans.
The carrier will publish those technical standards in the first quarter of 2008 and then expects to introduce the new choices to consumers throughout the country by the end of year. If consumers opt for the new program, they’ll be able to access software and services not offered directly by Verizon. The carrier services 63.7 million customers.
“You can buy any phone you want that meets our technical standards, and you can download to that phone any application you want,” said Nancy Stark, a Verizon spokeswoman. “This is going to spur development and innovation.”
Direct Access
For a consumer to access a service or feature on a phone today, the vendor or service provider usually needs to strike a deal with the carrier. With the new plan, customers can choose applications for their phones directly from content providers, publishers or service providers.
Verizon’s announcement followed news from Google that it had introduced its so-called “Android” development project. The goal of Android is to create an open and free mobile platform so that developers can create new applications for cell phones, the company said.
While the fruits of both the Verizon and Google projects are still many months away and some industry analysts are skeptical of their success, many TV networks plan to start developing new features and services for cell phones in the coming year.
MTV Networks expects to start work in 2008 to create new services for cell phones, said Greg Clayman, executive VP of digital distribution and business development at the network group. He’s interested in bringing more Internet-like experiences to mobile phones.
For instance, MTV Networks produces the Web site RealWorldCasting.mtv.com that lets viewers submit themselves to become a cast member in the “Real World.” “You could take that online experience and make it widely available on every mobile phone so viewers could try for a coveted spot in the house or become a casting director to judge who makes it on-air. You could work through [any] carrier,” he said. “We could develop a Real World application that is fully interactive and that’s something you can’t really do today. You will be able to do more stuff like that as networks become more open.”
Other applications could include new interactive services, faster network connections, and a la carte pricing for mobile video programs, said Linda Barrabee, analyst with Yankee Group.
Breaking down the walls will enable a fast and free development period for mobile phones, said Bob Walczak, CEO of mobile ad firm MoPhap. He expects to see more applications in the coming year that push the envelope on robust functionality, richer graphics and a better user environment. “You will also see more YouTube-like stuff, user-gen stuff, like taking a video your friend took, putting a music track on it and sending to another friend,” Mr. Walczak said.
One of the reasons the Internet has moved at practically light speed in recent years with broadband video, social media and other new services is the national footprint and ease of development online. Open standards in mobile will likely speed development for the smallest screen.
“The general trends towards openness makes mobile devices look more and more like the Web,” Mr. Clayman said. “So when a company like Verizon says it is going to start to allow any device to be on its network, and folks like Google say it is going to let anyone browse the mobile Web, that opens opportunities for companies like ours. What we have started to do and will do is develop more of our own applications, our own services, different ways of getting content directly to consumers.” MTV will continue to distribute through Verizon and other mobile carriers, but will also aim to expose its content to more consumers.
Indeed, these twin developments will enable consumers to personalize their mobile phones, Ms. Barrabee said. That’s the norm with most consumer electronics purchases, she said. “If you are buying a new PC, you aren’t forced to buy your PC and sign a contract and have a certain experience. You can go into a store or buy it online and you as a consumer figure out how to connect it to a network,” she said.
Some of the credit for the recent changes goes to the iPhone from Apple. Introduced in June, that phone broke the traditional distribution model because consumers could purchase it from AT&T or Apple.
Discovery, too, is also keen on the changes. “Similar to the launch of the iPhone, any development that brings greater consumer awareness to the functionality of mobile devices like the ability to view video on cell phones is good for driving the growth of the entire industry,” said Doug Craig, senior VP of digital media operations at Discovery. “It may not have an immediate impact but will certainly help continue to move mobile into the mainstream market in the long run.”
Driving Mobile Ads
The moves by Google and Verizon could also spur the nascent mobile ad market. In a report released last week, Zenith Optimedia said that creating better software will help drive the mobile ad industry. “2008 will see many telecommunications companies releasing their answers to the iPhone, which will make mobile Web browsing a standard for new-age handhelds. Google has already unveiled their new mobile software platform aimed at opening up and simplifying the creation of applications and services for the mobile phone. The software will work with nearly all mobile operators and handset manufacturers and create a more Internet-like experience,” the Zenith report said.
Next year will be a big one for change in the mobile TV business, but most of the changes won’t manifest for consumers until 2009 and 2010, said Neil Strother, lead analyst with Jupiter Research. That’s when he expects broader adoption of mobile TV. Today, mobile TV penetration is about 1.5% of all mobile phones, which represents less than 5 million customers. Next year penetration will grow to 2%.
To capture more ad dollars, the mobile market also needs standards and a standards body, akin to the Internet Advertising Bureau for online marketing, said Shar VanBoskirk, analyst with Forrester. “We need standard ads, who gets what percent of a CPM, what is the value of a mobile ad, what are they, what do you pay,” she said.

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