Media companies including News Corp’s MySpace and Viacom’s MTV Networks plan to cash in on the booming mobile phone market by offering a growing array of content and services.
The emphasis on selling content to mobile phone users, who are expected to pay either via monthly subscription fees or through fees for using data services on their phones, is also important for mobile carriers such as Cingular, Verizon Wireless and Sprint Nextel as they look for ways to expand.
Mobile carriers in the US, as elsewhere, hope that the increasing use of premium data services will offset pressure on their revenues from competition for voice calls.
However, there will be a tussle among media groups and mobile phone carriers about which side controls the relationship with consumers and how revenue is shared.
“The mobile business model is going to be somewhat fluid,” said Chris DeWolfe, co-founder and chief executive of MySpace, in a recent interview. “And it will be different in every country, with some having more advertising-based applications and some charging a small monthly fee.”
However, media and content companies believe that mobile phone users, who are used to paying extra for text messages, ringtones and mobile games, may be more willing to pay for services than internet users who expect to access online content for free.
This month, MySpace, the world’s largest social networking site, which is owned by Rupert Murdoch’s News Corp, signed a deal with Cingular, the biggest US carrier, to allow users to edit and view their profiles and post photos as well as send and receive messages.
Last month, Viacom’s MTV Networks created a centralised group to try to increase its participation in the mobile phone business. This group will develop ringtones, games, videos and other material based on its various brands to sell to mobile phone carriers. MTV’s push reflects a broader realisation among media companies that mobile phone services could form an important component of evolving digital businesses.
It is a global phenomenon. MySpace is also in talks with European and Asia carriers, for example.
MTV has deals in place with all the big carriers and claims to be the leading supplier of video content to mobile phone carriers – publishing more than 600 clips and 30 hours per month in the US.
US mobile carriers including the “big four” networks – Cingular, Verizon Wireless, Sprint Nextel and Deutsche Telekom’s T-Mobile USA unit – are in the midst of rolling out their 3G networks and are hoping that the fees on mobile video and TV services in particular will help to pay for their network investments.
Analysts, many of whom remain unconvinced that premium-priced mobile TV services will succeed, believe 2007 will be a crucial year for mobile video in the US.
They point out that Sprint Nextel plans to begin a dedicated mobile video service in the first quarter based on Qualcomm’s Media Flow technology.