RCR Wireless News
HOLLYWOOD, Calif. — Like many other forms of entertainment, watching mobile TV wastes time — at least to some. For the executives running mobile entertainment companies that routinely talk about the medium as such, there’s an apparent sense of pride or ease that comes with this definition. If not pride, at least it simplifies the mobile television opportunity at large.
“We help people kill time. That’s what we do,” Viva Vision CEO Nick Montes said at last week’s Digital Hollywood conference.
“Mobile video is about killing time,” Handango Inc. CEO Bill Stone said earlier at the same event.
Do they really mean to kill time, let it go wasted? Or is that just shorthand for describing what consumers are most likely to watch on a small screen knowing full well all the barriers that stand in the way of that experience? Things like metrics, carrier control, the user experience and varying definitions of decency, just to name a few.
Setting aside live, broadcast models like MediaFLO USA Inc., which still have relatively little scale, content providers see plenty of room to grow and find a solid path to eyeballs on cellular networks, both on and off carrier decks. Yet, it’s no surprise many want the carriers to relinquish the referee position and let content flourish off-deck as freely as it does on board.
The carriers, which own and manage the pipe that video is delivered through in this case, typically take 35% of revenues right off the top, Montes said on a panel of mobile video executives.
“Off-deck’s not going to go anywhere in a substantial way until the business model changes,” he said. “Until there’s a significant change on that from the carrier community, I don’t see any change for off-deck.”
Montes said carrier executives routinely tell him off the record that they know the system is broken. Something that’s evidenced by hard numbers, he argued.
Data revenues down
Data revenues fell overall for the first time ever in the second half of 2007, coming off gains in the first half of the year, he said.
“The business model for off-deck is, just right now, broken,” Montes said. “The industry hasn’t made it any easier for people to buy content.”
This all indirectly thwarts innovation, he said, and leaves part of the industry in a stare down.
Investors aren’t eager to contribute and drive innovation in mobile content under the current business model, Montes said; meanwhile carriers are worried about what financial hits they might suffer once the floodgates are shoved open.
Business models aren’t all to blame though.
“Today, the user experience is awful,” Stone said. It’s too difficult for consumers to find the content they’re looking for, he said. Moreover, the programming lineup for mobile looks like most companies have backed into the market with some of the least popular programs available.
People want big shows and brands right from the get-go, Stone said.
Enter Playboy Enterprises Inc. —there are few more widely recognized brands on the planet.
For a company that sprung up from America’s heartland, continues to make its home here and is built primarily on the beauty of unclothed Americans, it sure hasn’t been well received by the country’s wireless carriers.
The company that’s as much about the lifestyle of its founder Hugh Hefner as it is about glossy adult-oriented pictorials has developed a series of strategies and content offerings to meet varying degrees of tolerance within each country it does business.
“For us, our international business exponentially outgrows our domestic business today,” said Chris Petrovic, VP of business development in digital media at Playboy. “In general, there are just more progressive social norms that exist overseas,” he said on a panel, answering why carriers outside the United States are more willing to bring the Playboy brand on-deck.
Playboy content can be readily found on Verizon Wireless’ deck throughout the U.S. commonwealth of Puerto Rico, for example. The company’s had some success getting on board with mobile virtual network operators, but that market’s been shaky at best of late. Still, Playboy is left out of the big picture. It’s nowhere to be found on any tier-one or tier-two carrier decks, Petrovic said.
“On the whole, folks that run programming for the international operators are much more progressive than the operators here,” he said, adding that Playboy is in all the major markets in Europe and Asia, almost 50 countries.
“Instead of continuing to fight with the carriers … we’re focusing our efforts on taking advantage of the channels that are available to us,” Petrovic said, citing outlets such as WAP sites and other direct-to-consumer, or off-deck, opportunities.
“We’re not relying on the carriers to make or break our mobile business here in the United States,” he said.
Although Playboy isn’t being invited to the dance by U.S. carriers, it’s finding success with mobile video and other content all on its own.
WAP sites are generating a lot of traffic in the United States, Petrovic said. With no marketing or advertising a series of WAP sites are getting 200,000 to 250,000 visits per week, he said.
And so, even though carriers abroad have embraced the company with more open arms, Playboy’s success on mobile in the United States is growing organically, almost entirely from brand name recognition.
Matthew Feldman, president and CEO of Versaly Entertainment, also sees a great deal of opportunity in off-deck.
“The carriers are delivering an inferior product right now,” he said, adding that if off-deck wasn’t a successful business model as it exists today, there wouldn’t be so much development around it.
Everyone agreed that reporting and viewing metrics remain the most glaring missing piece of the puzzle.
“Anyone in the mobile industry will say reporting is probably one of the weakest segments of the mobile industry,” Feldman said.
Companies like his are trying to identify the demographics that are using mobile video, he said.
“We’re really inheriting a lot of business intelligence from the TV industry,” he said. But the wireless industry has failed to follow down that path to a large extent.
For that reason, Playboy prefers to try things first online, a place it views as a much better “breeding ground” since it allows managers to see the number of views, impressions and other usage statistics in real-time, Petrovic said.
“Whereas here (in mobile), you’re lucky if you get a revenue check at the end of every cycle,” he said.
MobiTV Inc., which has almost 4 million subscribers, has the same problem, said Jack Hallahan, VP of advertising and brand partnerships at the company. MobiTV knows what device type is watching at any time, but it still doesn’t know who that user is, he said.
“We don’t have a data point of exactly what’s happening on the last mile,” Hallahan added.
Despite the fact much of each user’s private information is unknown to the content provider, Feldman concluded that there’s still sufficient room to operate, albeit with a little hypothesizing and a lot of reliance on general knowledge.
“Content does drive demographics and true, the carriers are withholding consumer demographics from us, but if you’re showing Playboy content or full-contact fighting, there’s a certain demographic watching that,” he said.