Wednesday, May 24, 2006

Ovum: Digital Hollywood Spring: the rules are changing

Josette Bonte at Ovum writes about the recent Digital Hollywood Spring in Los Angeles, a major event for the North American content industry. Bonte states that "the explosion of interest in short-form filmed entertainment delivered over mobile phones will also have repercussions on the traditional entertainment industry modus operandi." She notes that:

There are positive signs that mobile TV is starting to take off in the US. Sprint, for example, bundles TV offerings with any basic voice and data package selected by its customers, and MobiTV currently boasts over one million subscribers to its service through its affiliated carriers, including Sprint PCS, Cingular and Orange.

However, one of the big issues facing the mobile TV industry is actually licensing the rights to existing content, and indeed mobile rights may have been granted inadvertently to cable or broadcast networks as part of muddled rights definitions. In addition, the revenue splits accruing to actors have not been specified by the guilds, so there is the risk of antagonising stars that are currently appearing in other movies produced by the same studio by depriving them of those revenues.
Bonte identifies the another key theme that emerged was "in the nascent industry of filmed entertainment over mobile." She said that "brand rules and is the chief incentive for operators to do business with the content aggregators. Sony, for example, has just introduced a service in Italy that allows mobile phone subscribers to view feature-length movies with full DVR controls (fast forward, pause and rewind) on their mobile screens." Bonte concludes that:
Mobile operators have some learning to do, and in fact look set to follow the more traditional footsteps of the CATV operators in terms of packaging. MobiTV's content line-up for example, is similar to basic cable TV. The company offers a bouquet of mobile'channels' featuring 15 or 30 second commercial 'spots' that users have to watch in order to access the content. It is possible that mobile operators will follow the CATV example by starting with acquired licensed content and moving eventually to original programming. However, it remains to be seen whether this traditional approach will be a successful formula in the new media environment.