Mobile content and entertainment providers took the keynote stage at CTIA Wireless I.T. & Entertainment on Wednesday and described a sunny future for music and mobile operators, video vendors and consumers.
Although the availability of multimedia on handsets is still at an early stage, partners are starting to make significant investments in technology with the hope of creating fat revenue streams. In his portion of the keynote, RealNetworks Inc. Chairman and Chief Executive Officer (CEO) Rob Glaser discussed Cingular Wireless LLC's adoption of Real's Helix Online TV technology to run a streaming video service. The system allows a service to easily "fall back" to support video delivery to devices on both 3G (third-generation) and slower mobile networks, Glaser said.
The biggest barriers to wider use of mobile multimedia are differences among handsets, the need to address a mass market rather than just early adopters, and simplifying complex infrastructures for consumers, Glaser said. Real is working on all those problems through partnerships and gradually learning about what consumers want, he said. One surprise has been that the most popular games on phones have been casual, nonviolent games played predominantly by women, a far cry from the norm in PC gaming, Glaser said.
Mobile phones and other digital delivery formats are the best thing to happen to the music business in years, said Edgar Bronfman Jr., chairman and CEO of Warner Music Group.
"The stage is set for the revitalization of our industry," Bronfman said. Contrary to the views of some observers, the breaking up of albums into songs and their delivery on many different devices are going to increase music sales across the board, he believes. In the five quarters since Warner Music was acquired by AOL Time Warner Inc. the company's digital music revenue has grown from essentially nothing to about six percent of its revenue as of last quarter, Bronfman said.
"Wireless will become the most formidable music content distribution platform on the planet" as soon as the mobile buying experience is competitive with buying on other channels, Bronfman said.
Music sales by phone companies over private networks, copy-protected with DRM (digital rights management) technology, will be especially good news in countries with major piracy problems, such as China and Russia, Bronfman said.
He expressed hope for a single DRM standard across the industry, advocating Sun Microsystems Inc.'s DReaM Project, which the company announced last month would be released soon under the open-source Common Development and Distribution License (CDDL).
Game developer Digital Chocolate Inc. announced a mobile sports prediction game, Mobile League Sports Network (MLSN), that is set to launch next month on the Cingular, Verizon Wireless Inc. and Sprint Nextel Corp. networks. Players will answer multiple-choice questions about upcoming events in the sports world and will be ranked against other players for the accuracy of their predictions, said Trip Hawkins, founder and CEO of Digital Chocolate. They will also be able to join public leagues playing the game or create their own private leagues by inviting friends to join, Hawkins said. They will also be able to communicate with other players through text messaging.
The key to successful content on mobile phones will be social activity, according to Hawkins. Pure content, such as movies and music, will never represent more than ten percent of revenue for mobile operators, in his view, because consumers have proved they will pay to interact with people. The success of voice, text messaging and e-mail is evidence of this, he said.
"Anything that comes along that gives people a new way to have social contact, they adopt it," Hawkins said. He referred to a conference in a neighboring convention center to drive home his point.
"We are in Moscone West. This is the small Moscone. Across the street, you've got Moscone Center. You know what's going on there right now? It's all doctors, and they're learning about all the new drugs they're going to give us. Because we're not happy. And we're not sure why," Hawkins quipped.
IDC mobile device analyst David Linsalata agreed that interaction is a key driver for mobile games. "Community is definitely a critical component going forward," Linsalata said, including both online interactive gaming and sharing tips with other players.
"We have these phones so we can talk to other people. The most successful games are going to be the ones that leverage that," Linsalata said.