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H’wood comes calling on mobiles

$50 bil payoff lures biz to cellphone confab

BARCELONA — What do you get when two powerful industries that are used to calling their own shots but are unfamiliar with each other try to chase $50 billion together? 

According to the chief creative officer of reality TV trendsetter and “Big Brother” creators Endemol: A prickly crossbreeding rodent.

And yet that’s what the entertainment biz and mobile carriers are attempting.

“When you make love with a porcupine, you approach things cautiously,” Endemol’s Peter Bazalgette said last week. He was speaking at the mobile industry’s biggest annual conclave, the 3GSM World Congress running Feb. 13-16, where the mobile entertainment theme took centerstage among the 50,000 showgoers. Speaker after speaker referred to the $50 billion that mobile entertainment could generate by 2010, if only the studios and carriers could figure out how to share it.

Clearly, the entertainment biz wants to get the mobile show going. Hollywood, TV and the record labels came here in droves to let the world know that they want to entertain people on the ubiquitous cellphone, of which there are roughly 2 billion in the world, growing to 3 billion in a few years time, according to estimates.

Execs from Disney, Warner Bros., Fox, Endemol, MTV, “Idol” producers Fremantle,  Rupert Murdoch’s Brit satcaster BSkyB, Sony BMG, Universal Music and EMI Music all came here to spread their mobile message.

But the big question is exactly how the cellular carriers will work together and share the $50 billion pie with Hollywood et al.

As Gary Carter, chief creative officer at Fremantle put it,  “I’m not always sure we have the language to understand each other.”

One thing cell carriers and content providers do understand, though, is that each side brings a swagger that doesn’t always go down so well with the other. Mobile operators are, after all, dealing from strength. They own about 2 billion cellphone customers around the world, which is roughly double the number of TV households on the planet.

With that kind of clout, “some of them have a slight whiff of Hollywood about them,” Bazalgette told Variety.During one mobile media panel session, Graeme Ferguson, who heads global content for U.K.-based Vodafone — the second-largest operator in the world and partners in the U.S. in Verizon — shot back that the big media companies “are an equally arrogant batch.” He faulted them with having taken too long to come to the mobile table.

A number of issues were eating entertainment companies. Among them: they’re not always happy with the 40%-to-60% revenue share they get when they sell through an operator’s “portal” or “deck” — prepackaged services such as Verizon’s Vcast and Vodafonelive.

For TV makers accustomed to selling programming at a markup to broadcasters, the revenue-sharing approach is unfamiliar and can make them queasy. They often say consumers have trouble understanding confusing and expensive carrier pricing. TV execs were calling last week for advertisers to join the mobile TV race to help lower the price to consumers.

Some complain carriers can make it difficult for consumers to find content by giving it a bottom-shelf position in the portal, and that portal services are hard to use.

“Some of the operators are challenged in their ability to run their own portals,” says Attila Gazdag, European managing director for Walt Disney Internet Group.

Others say carriers don’t do enough to market individual programs, don’t share enough information about user trends, don’t tailor their handsets enough to enhance the creative possibilities of the phone. 

“The real prize for the mobile is to treat it as a medium in its own right,” Bazalgette says.

Endemol has created a mobile division dedicated to making shows only for the cellphone, including a series called “Extreme Reality.”

Although mobile operators have a grip on the cellular customer base, media companies made clear at 3GSM that they are also finding other ways to get their songs and shows onto cellphones. As mobile Internet browsing improves, and as Internet companies like Google and Yahoo! start making it easier to find things outside operator portals, some of them plan to build their own mobile sites.

Warner Bros. will launch such a site within the next six months, says Justin Richardson, the company’s London-based director of European business development for wireless. The move coincides with plans to make available material from Warner TV offerings, and in some cases, to even offer full-length films to the mobile user.

“Eventually, we want consumers to be able to search on their own and find ‘Looney Tunes’ or ‘Batman,’ ” says Richardson. “We don’t want them necessarily to go through an operator.”

By putting the material on its own site, Warner also gains “the ability to control the editorial environment to a greater extent,” he says.

There are many other routes around operator portals. Some like Disney, are launching their own mobile networks.

And outside the U.S., media companies are distributing material via text messaging using “short codes” advertised on TV and magazines. That method has been popular for games and ringtones, but is expected to play a role in music and video as well.

“It’s about distribution choice,” says Ted Cohen, senior veep for EMI Music. “If it’s through an operator portal, great, but if it’s from the back of a magazine, that’s great too.”

Media companies are also closely watching the emergence of broadcast technologies that will allow them to transmit programs to phones over broadcast airwaves rather than mobile networks.”We’re all trying to stake our claims,” says Sanjiv Ahuja, the boss of pan-European cellular carrier Orange, which is part of France Telecom. “May the best player win.”

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