BARCELONA — Mobile entertainment took a big step into the spotlight at the 3GSM mobile phone conference last week. But amid debuts of short films from Sundance and Bollywood and splashy new handsets, one thing was clear: Big Entertainment and Big Telco haven’t yet figured out how to work together.
Whether it’s a Dayton/Faris film, Dirty Sanchez or a Red Hot Chili Peppers song, the two industries are still sizing each other up as they try to figure out the best way to get entertainment into the hands of mobile consumers in a profitable way.
“As an industry, we have to become easier to do business with,” admits Arun Sarin, chief executive of Vodafone, the world’s largest mobile operator in revenue with £29.3 billion ($56.8 billion).
Entertainment execs have complained that cellular carriers have tried to take too much control of the revenue and presentation of mobile entertainment through their own mobile portals (“decks” in the U.S.).
They also criticize carriers for charging too much by levying an extra “data” charge on top of the price the consumer pays for the content, and they say that carriers’ entertainment services are scaring off potential users because they’re too complicated. This is slowing what Juniper Research says could be a $76 billion business by 2011.
Warner Music boss Edgar Bronfman Jr. conveyed that message in a rallying keynote Feb. 14, noting that the two industries are “leaving billions of dollars in unrealized profits,” and pointing out that only a tiny portion of mobile users bother to tap into music.
“It’s expensive, it’s complicated and it’s slow,” he said. “We often get very frustrated because user-interfaces are really quite inadequate.”
“We’ve got to improve the consumer experience,” concurs Lucy Hood, chief executive of Jamba, the News Corp.-controlled provider of mobile entertainment. “It’s a billion-dollar business but it could be oh so much more.”
Mika Salmi, president of Global Digital Media for MTV Networks, also called on operators to share more data on consumer usage.
Carriers, in return, have criticized entertainment companies for some of the same issues, noting they have been grabbing for too big a share of the revenue pie in light of the billions of dollars operators are spending to upgrade networks so they can carry entertainment.
Although relations seem to be improving — Vodafone started opening up its Vodafone live! portal by adding Internet links — entertainment companies continue to also figure out ways to reach the mobile consumer directly. While continuing to work with carriers and their 2 billion global customers, they are at the same time increasingly bypassing the carrier decks through various means such as running their own mobile Web sites.
News Corp., with its marketing muscle, is well positioned to drive users straight to the Jamba mobile site via the open mobile Internet. It has pushed aggressively into direct to consumer (D2C) mobile distribution by acquiring a controlling interest in mobile content creator and aggregator Jamba, known as Jamster in the U.S. Mobile versions of many of its properties including “The Simpsons,” “24,” “American Idol” “Prison Break” and “The Simple Life” air on Jamba.
Hood might have been hinting at strong direct-to-consumer intensions when she said in a keynote speech that when it comes to business models, “we will be relentless.”
MTV’s Salmi says, “I’m personally a big fan of direct-to-consumer. We want to be directly in touch with them rather than have a middleman.”
MTV markets a stable of properties on mobile including “Pimp My Ride,” “Dirty Sanchez,” “South Park” and “Busta Moves.” Most of its mobile business now is through carriers.
Entertainment and telco will also fight over revenue from advertisements bought on mobile phones, a fledgling business that many people believe will be a tremendous boost to mobile entertainment. Market research firm Informa forecasts a mobile advertising market of $11.4 billion by 2011.
What was striking at 3GSM was that people from all walks of the entertainment industry including Oscar-nominated directors Jonathan Dayton and Valerie Faris (“Little Miss Sunshine”) had mobiles on their minds — and in their production studios.
“I imagine it will work like the Internet — some of it’s free, some of it you pay for,” Dayton says.
Dayton and Faris plus four other Sundance-funded directors and Bollywood director producer Sanjay Gupta all debuted made-for mobile short films at 3GSM. The Sundance films are free.