Mobile entertainment
by Debra Kaufman

Is your phone ringing? It could be Hollywood calling with a long list of mobile-entertainment initiatives.

During the past few weeks, MTV Networks launched its entertainment content directly to Sprint PCS customers with video-enabled phones, CBS Digital announced development of an original soap opera for the smallest screen, and Fox Mobile Entertainment opened Mobizzo, a one-stop online shop for cell-phone entertainment.

Everyone is staking out turf on the mobile airwaves. Studios, networks and other entrepreneurial content creators see mobile as "the next big thing" and are trying out numerous business models in order to devise winning strategies. Even as the current return on investment is "to be determined," content creators are taking aggressive steps into the space, based at least in part on the enormous success of cell-phone entertainment in Europe and Asia, which are one to three years ahead of the U.S. market.

Mobile content offers many potential rewards, of which profitability is only one. Opportunities also exist in terms of creating synergy among platforms, reinforcing loyalty to TV programs and, of course, extending brands.

"We want to be anywhere kids are," Nickelodeon Digital Media executive vp Steve Youngwood says. "Our overall mission is about being on all platforms relevant to kids, and mobile is one of them. We're about being as ubiquitous as possible."

Ubiquity is a major theme threaded through all mobile-content strategies. CBS Digital Media vp wireless Cyriac Roeding cites a recent study that found that 64% of 25- to 35-year-olds always or almost always have a cell phone on their person.

"The cell phone might be the screen you look at more than any other screen," Mobile ESPN vp product development John Zehr says. "It's critical that ESPN speak to sports fans that way."

The arena of video content for mobile platforms is so fresh that business strategies are practically evolving in real time. Fox Mobile Entertainment president Lucy Hood notes that her company's wide range of mobile strategies include sponsorship (text voting on "American Idol"), premium play with original video mobisodes ("24: Conspiracy") and deals with carriers such as Cingular and T-Mobile that allow fans to download familiar content. Mobizzo marks Fox's next, as-yet-untested move into mobile.

Amp'd, which has struck strategic alliances with MTV, Comedy Central, VH1, CMT, MTV2, mtvU, TV Land, Spike TV and Logo, has two business models: Amp'd Mobile, which integrates mobile entertainment with traditional cell-phone services and a branded interface (see related story at right), and Amp'd Live, which makes content from its partners available for licensing by carriers worldwide.

The deals being struck between content providers and mobile companies vary, according to lawyer Ivy Kagan Bierman.

"Some of (the deals) have minimum guarantees, which the cellular providers pay to the content providers," says Bierman, a partner in Loeb & Loeb's entertainment and litigation departments. "Beyond that, there are generally license fees for the content and sometimes negotiated splits with respect to the revenue generated by the exploitation of the content on the mobile devices."

Bierman adds that the new medium is introducing legal issues for anyone in the game. Most notably looming on the horizon is the question of who will be responsible for paying guild residuals.

While mobile strategies most likely will sort themselves out over time, studios and networks are focused on expanding their brands to devices that are practically welded to the ears of the youth demographic.

"Wireless is a great way to establish loyalty with our programs and make sure that when people aren't watching TV, they're still connected with our shows," says Roeding, who notes for example that a fan of E! Entertainment Television can receive video alerts of breaking news about his or her favorite celebrities.

At Fox, Hood describes mobile content as "a new kind of parallel medium that can really enhance people's relationship with a brand they love. You've got to believe that someone who has a 'Family Guy' ringtone on his phone is also watching the show."

Prevailing wisdom states that mobile viewers "snack" on content, and therefore the content that works best is short (one to three minutes), eye-catching and -- for the key youth demo -- funny or thrilling. It's a world apart from repurposing hourlong episodic TV shows for international, DVD or airlines, so studios and networks must adopt new strategies to make their deep libraries compatible with the demanding parameters of the extra-small screen.

Youngwood notes that Nickelodeon's current mobile strategy consists primarily of extracting clips from existing programs, including the popular shows "Dora the Explorer," "The Fairly OddParents," "Jimmy Neutron: Boy Genius" and "SpongeBob SquarePants" -- all of which are carried on the Verizon V Cast-powered Nick Mobile portal.

"But for live-action shows, we will do funny outtakes or interviews with live-action talent," he says. "We'll be creating material like DVD extras -- shortform, but based on properties that kids love."

Comedy Central executive vp and general manager Michele Ganeless says her channel plans to clip and repurpose material from its "incredibly deep library," which includes "The Daily Show" and "South Park." This month, Comedy Central is set to debut "Samurai Love God," an original animated mobile series voiced by "Daily Show" correspondent Ed Helms and adult-film star Jenna Jameson.

"We look at everything we do as a little development lab," Ganeless says. "Right now, for us, it's about the content."

Bunim-Murray Prods. ventured into mobile entertainment with mobisodes based on outtakes of its Fox reality TV show "The Simple Life."

"We thought we could customize reality content in ways that might be accepted over that platform, so we did it, almost as an experiment, for the second season of 'Simple Life,'" Bunim-Murray CEO Joey Carson says. "The success of that led us to believe there is clearly a demand there."

If you can't tick off the names of five original programs on your cell phone, there's a reason. Starwave Mobile executive vp and general manager Larry Shapiro notes that content providers have been repurposing assets and extending their brands -- rather than creating new programming -- until they have a better handle on how audiences will respond to original mobile content.

"I believe original content works best when it's related to nonoriginal content that people are familiar with," he says -- and many experts agree.

Mondo Media's Flash-animated "Happy Tree Friends" offers a sterling example of the benefits of familiarity. A hit among young adults, "Friends" began as a series of online shorts in 2000, then migrated to DVD after the Internet bubble burst. Mondo co-founder and CEO John Evershed recalls that his company created "Friends" apparel, accessories and action figures at that point -- and then was ready when video-enabled handsets arrived.

"It was popular in Germany very early on," says Evershed, who also notes mobile deals for "Friends" throughout Europe, Asia and Latin America. (The Walt Disney Co.-owned Starwave Mobile recently inked an exclusive licensing agreement to carry "Friends" in the U.S.)

Because the business of creating mobile content is so new, there is no surefire formula for success. Roeding and Hood agree on three essential elements: communication, personalization and entertainment.

"The sweet spot is where these three circles intersect," says Roeding, adding that the new CBS soap opera "Hey, It's Me" has been designed to hit that spot.

Whereas many media experts have bemoaned the limitations of extra-small screens, Roeding cites their strengths.

"This is the only medium you carry with you while you're using other media -- when you watch TV, walk down the street and see a billboard (or) listen to radio," he says. "It makes other media interactive."

Amid all of the recent activity, though, no one seems to have an answer to the all-important question: Is anyone making money with mobile content?

"We've seen a lot of money out of Europe," says Evershed, who declines to reveal a dollar amount.

Games, ringtones and wallpaper are booming, but it cannot yet be determined whether the bottom line for mobile video content will be written in red or black ink.

"The jury is still out on what the economic model is," Ganeless says. "I wish I could say we know exactly what our margins and return on investment will be, (but) we're still figuring it out as we go along."