Growing heft of U.S. wireless carriers puts communities like Overland Park, Kansas, on the showbiz
They come from places like Atlanta; Overland Park, Kan.; Bellevue, Wash.; and Bedminster, N.J. But when the top wireless carriers in the U.S. dial Hollywood these days, they aren’t getting put on hold anymore.
After all, Cingular, Sprint, T-Mobile and Verizon collectively control about 90% of the nearly 200 million cell phone subscriptions in the U.S. And with that reach come the keys to the territory’s still-nascent yet fast-growing mobile data marketplace — one that’s expected to be worth as much as $35.8 billion by 2009, according to the Yankee Group.
Following the lead of Asian and European mobile carriers like DoCoMo and Vodafone several years before them, these phone companies are in the process of transforming themselves into content brands, forging vital relationships with the major U.S. entertainment congloms.
“When we first started talking to Hollywood two years ago, things were slower,” explains John Stratton, Verizon’s chief marketing officer. Indeed, film and TV companies weren’t terribly interested in details like the appropriate font sizes and framing for content on mobile phones at that time.
“If you were a producer, you were thinking, ‘Well, that’s just more overhead,” he adds. “Now, you’ve got this gold rush where people are running to it and saying, ‘Okay, I’ve got to figure this medium out.’ Now we talk about things like storyline extensions, prequels, sequels, backstories; we have tons of that in development.”
“Maybe we were on the fringes before, but now we’re much more engaged and involved in that whole entertainment film space,” adds Sprint marketing exec Suzanne Lammers. “We’ve got people coming to us.”
Here’s a brief look at a few of these major U.S. carriers’ key content deals to date and their dealmakers.
Headquarters: Atlanta, Ga.
Subscribers: 54.1 million
Some recent deals: The company just launched its Cingular Video service for its 3G network subscribers. An initial partnership with HBO lets these users preview select episodes, and exclusive materials from pay-cabler series including “The Sopranos,” “Deadwood,” “Entourage,” “Curb Your Enthusiasm” and “Rome.” Earlier this year, during the promotional run-up to “Star Wars: Episode III – Revenge of the Sith,” Cingular entered into a pact with Lucasfilm that provided subscribers ringtones, games and screensavers from the film. A notable deal with music label Interscope-Geffen-A&M was also cut to provide Cingular Sounds subscribers ringtones, video postcards and other digital tsatchkis from singer Gwen Stefani. “In past years, we used to find the hot artists and approach the labels,” notes a Cingular spokeswoman. Now, they are seeking us out.”
The growth factor: Cingular — a joint venture between AT&T and BellSouth — noted in its fourth-quarter earnings report in January that its average revenue per user for data services — a catchall term that includes things like ringtones, games and video clips — increased 63% to $4.71.
The dealmakers: Cingular’s mobile content efforts are led by chief marketing officer Marc Lefar and John Burbank, VP of marketing. (Burbank brought the HBO deal to Cingular, serving as liaison to the pay cabler.) Both report to company COO Ralph de la Vega.
Headquarters: Bedminster, N.J.
Subscribers: 51.3 million
Some recent deals: Amid a flurry of joint activities with Viacom, Verizon’s Vcast Video service recently added clips from CBS News and “Entertainment Tonight” produced specifically for cell phones, as well as clips and behind-the-scenes footage from shows like “CSI” and “Letterman.” Meanwhile, the Viacom-owned cable group will provide Vcast subscribers clips, programming and other shortform content from its networks including Comedy Central, VH1, Nickelodeon and MTV. Notably, VCast has worked with Twentieth Television for several years on exclusive mobisodes of the Fox series “24.” Meanwhile, the just-launched Vcast Music service offers one million songs for download from Warner Music Group, EMI Music, Universal and Sony/BMG.
The growth factor: In its January fourth-quarter earnings report, Verizon noted that revenue from data services in 2005 more than doubled over ’04 to $2.2 billion.
The dealmakers: Leading Verizon’s mobile content initiatives are John Stratton, VP and chief marketing officer, and Ryan Hughes, director of content and programming. (Hughes works from L.A. much of the time.) Robin Chan and Ted Casey are associate directors of marketing for Vcast Video and Vcast Music, respectively.
Being one of the biggest brand advertisers in the U.S. helps Verizon open doors, Stratton says. “The billion-plus dollars in ad spend that we have out there does provide for some pretty good connections with some of the same people who own the content that we’re looking to deliver across Vcast,” he explains.
Headquarters: Overland Park, Kan.
Subscribers: 45.6 million
Some recent deals: Sprint TV allows subscribers to choose from 34 channels of on-demand programming, including the NFL Network, Fox News Channel Live, the Learning Channel and E! Entertainment. (The service even garnered Sprint and technology partner MobiTV an Emmy last fall for technological achievement.) The carrier recently struck a deal with Disney to lease its network out for the launch of ESPN Mobile. And as the brand sponsor of the Super Bowl halftime show on ABC, Sprint offers 249 Rolling Stones tracks for download via the Sprint Music Store.
The growth factor: According to Sprint’s Oct. 26 third-quarter earnings report, its pro forma revenue from wireless data services grew 62% year to year.
The dealmakers: Sprint’s mobile content push is led by Jeff Hallock, VP of consumer marketing and strategy. Other key content players include Dale Knoop, GM, and John Burris, director of digital media programming and multimedia services.
“There was a period when I was out in L.A. three times in a 10-day period,” Knoop says. “Because of our Emmy win, we’re often tapped now by the TV Academy to talk about mobile.”
Headquarters: Bellevue, Wash.
Subscribers: 21.7 million
Some recent deals: A subsidiary of Deutshche Telekom AG,
T-Mobile is looking to build its wireless data market share in the U.S. It already has deals with Sony/ BMG, Warner and Universal Music to deliver ringtones and songs.
The dealmakers: T-Mobile USA’s content drive is led by chief marketing officer Mike Butler; Michael Gallelli, director and head of product marketing; and Kyle Levine, director, product management and business development of content services. “T-Mobile has established solid, ever-
expanding relationships with most of the major media companies including music labels, and movie and TV studios including Disney, Sony Pictures and Fox,” Levine says.