In Vegas, All Things Great and Small

With major networks making content deals with telcos almost every day, mobile devices will dominate the buzz at the huge Consumer Electronics Show (CES) in Las Vegas Jan. 5-8.

But cellphone video is only one segment of a mobile video market that will take center stage at CES. Video Without Boundaries, for example, will demonstrate its Flyboy “HD” portable media player with a 3.5-inch screen, and E Digital will unveil MediaViewer, a portable media player with a 7-inch screen.

The small screen was a nearly invisible business in 2004; now the research think tank Yankee Group predicts information and entertainment services on mobile phones will grow from $1.3 billion in revenues in 2005—mostly from music and ringtone sales—to about $4.9 billion in 2009.

About half that revenue will come from video broadcasts. Sports programming and newscasts from networks and stations are likely to be strong draws for wireless video among consumers, which has many in the TV industry taking note.

Sports and news go hand-in-hand, since both involve delivering time-sensitive coverage. This, in part, is leading ESPN to market Mobile ESPN, which includes a branded mobile phone already being sold online. The Sanyo MVP, featuring a jet-black housing and accent elements in ESPN's signature red, goes on sale via retail Feb. 5, along with a full-service rollout. Mobile ESPN will deliver customizable ESPN content using Sprint's nationwide cellular network, including real-time scores, breaking news, and analysis in both audio and video formats.

But as fascinating as the idea is, the industry will be watching to see if the business model holds up.

ESPN viewers are certainly a loyal group, but they will be asked to pay a $399 price tag for the phone, plus about $65 a month for a basic package of wireless content and Web access—including ESPN sports video clips and premium programming.

ESPN now captures the largest per-subscriber fee from cable operators, and the cable network has secured a variety of exclusive wireless-content– distribution rights, including NFL and National Hockey League footage. Furthermore, six major corporations, including Cisco Systems and Nike, have already signed year-long advertising agreements in support of Mobile ESPN.

As ESPN's venture illustrates, programmers face a large variety of hurdles in taking content from their studios to mobile phones, but market dynamics are making it easier than ever before to enter the wireless video jungle.

A large player in this field is MobiTV, which provides an end-to-end solution to take broadcast-TV content to mobile devices of virtually all types. Its technology essentially translates the standard broadcast-TV signal into a format fit for wireless devices.

Live TV feeds are delivered to mobile subscribers via the MobiTV service, to which subscribers pay $9.99 per month for MSNBC, ABC News Now, CNN, Fox News, Fox Sports, 3GTV, NBC Mobile, CNBC, CSPAN, The Discovery Channel, TLC, The Weather Channel and others that deliver cartoons, music videos and comedy. It also carries ESPN clips and features, but not to the degree Mobile ESPN plans.

A similar provider is GoTV, which supplies a platform for continually updated content viewable at any time from ABC News, ABC Entertainment, Univision, Fox Sports and iFilm, as well as original programming produced in the GoTV studios specifically for mobile phone users for a monthly subscription.

“The biggest issue programming execs cite is market adoption,” states MobiTV COO Paul Scanlan. “Companies like ours are becoming more in demand and important as broadcasters take content mobile.” Given the large number of formats on both ends of the spectrum, aggregators and content repurposers have the daunting task of proper formatting and delivery. That lets creators create, without worrying about how it will be converted for other delivery devices.

MobiTV simply takes the original broadcast signal and delivers it to handsets, though the underlying technology is much more complicated than it might seem. MobiTV's approach has an added benefit—it can buffer for lost signals suffered by standard voice cell users by “piggybacking” on the TV signal being broadcast by the station or network. The company, which boasts over 500,000 subscribers, actually prefers to be called the first wireless TV affiliate, simply adding another option for program distribution without the headaches.

Scanlan says, “News is a big driver, but in slow news months, we see more consumption of regular network and cable programming. We are seeing more prime time programming, and there's actually more than we can really handle at once.” Not long ago, he says, MobiTV had to chase after content. Now there are content providers clamoring to get MobiTV involved.

The networks are creating divisions to fashion mobile-friendly content. For example, the new NBC Mobile is an extension of the studio designed specifically to produce wireless programming. Walt Disney Internet Group's version is known as Starwave Mobile; it licenses and publishes content from third-party companies and non-Disney brands from within The Walt Disney Company.

That division also develops original content and maintains key relationships with the major U.S. carriers. That's how programs like Lost and Desperate Housewives migrated to iPod.

Networks have the size to deal with those issues. Stations don't, which is why many local broadcasters are turning to third parties to address the issues. Sam Matheny, owner of wireless-news-distribution solution provider CBC New Media, doubles as the general manager of News Over Wireless for WRAL, a television innovator in Raleigh, N.C. Two years ago, Matheny launched a downloadable tool for Sprint phones allowing consumers access to five live radar images, 50 traffic cams, world news, and sports in text and graphic format. He says video is being pushed as market adoption increases, noting that a non-video subscriber today can be a video subscriber tomorrow.

He's currently partnered with approximately 30 other stations to help them translate their content, notably local newscasts, to phones. He says the News Over Wireless service can take custom or repurposed content and automatically code it for mobile phones. “You want a good user experience the first time,” he adds, since mobile users who aren't happy the first time won't return.

Stations don't lose much by partnering with News Over Wireless; the broadcaster shares the revenue. Viewers pay News Over Wireless $3.99 a month for an “always on” connection to the live broadcast, which can be done over the wireless device via a screen prompt.

But this nation's mobile video providers are playing catch-up.

“The U.S. is behind on technology and ahead on penetration,” says Scanlan. “We tend to have more and better mobile content, and thus more potential for revenue, but we're behind technologically.”