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Cell Phone Novels: Blockbusters in Japan

You probably are aware of the fact that, in Japan, novels written on the cell phone have become quite the trend. In New Yorker magazine, Dana Goodyear wrote a wonderful “Letter from Japan” about how young women authors there have created the genre of cell-phone novels or keitai shosetsu. Goodyear reported that, in 2007, cell-phone novels held four of the top five positions on the literary best-seller list in Japan. “The Red Thread,” by Mei, which has sold 1.8 million copies, was No. 2. “Love Sky,” by Mika, was No. 1, and its sequel third; together they have sold 2.6 million copies. Some of those novels have been re-issued in print form.

Do cell-phone novels have a chance to become popular in the U.S.? Let me know what you think.

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Creating Content for the Mobile Platform

From Mobile Content & Marketing Expo

San Jose, CA—Assaf Tarnopolsky, vp of mobile programming & digital product development at Sony Pictures Television International, gave the afternoon’s keynote address. SPTI is heavily involved in creating and distributing original mobile content, from the immensely popular “After World” to the new “Gemini Division.”

Assaf Tarnopolsky, just before keynote

Assaf Tarnopolsky, just before keynote

Tarnopolsky recalls when he entered the industry in 2005; when he told his friends that he was going to be putting TV on the phone, he remembers getting a lot of very strange looks and comments as to why anyone would want to do that. “Luckily, it seems to be working out,” he said. “People do want and need that, and you’re here because you believe that.”

“Media services–music, movies, TV–will become ubiquitous on mobile devices the way that mobile devices themselves have become ubiquitous and features like cameras have become ubiquitous on those devices,” he said.

Tarnopolosky tried to give attendees the studio’s view of creating mobile and digital content creation. “We’re experimenting, we’re trying new things and in the process learning,” he said. “We’re trying to be in the vanguard as models and new consumption patterns emerge.”

The good news is that metrics are moving up, said Tarnopolsky. “Telcos are making massive investments in new networks like 3G, the new standard. The overall growth rate of subscriptions is slowing due to saturation, 3G subscriptions are expected to double in the next couple of years.” He also pointed to the advent of 4G and its promise of broadcast video, and new handsets enabling companies like Sony Pictures Television International to deploy rich media.

The biggest game changer now is the iPhone, he said, adding to the chorus of others saying just this today. “There’s been a fundamental shift in the public’s understanding of media-on-the-go,” he said. “Even my mother and mother-in-law see people using mobile media and understand the utility.”

Since SPTI is an international company, Tarnopolsky has a view to what’s going on with mobile TV in places like France with telecom provider Orange. “In South Korea, there’s a ton of usage and a lot of money being made,” he said. “They’re to be 20 percent more business with one-sixth the population. It’s big business and moving in the right direction. Twenty-two percent of their population watch mobile TV on a regular basis and for over an hour today, versus our more snack-sized mobile content.”

Looking into the future for the commercialization of mobile content, Tarnopolsky suggested looking at fast-growing markets in India, China, and Brazil or even at the youth in the USA. “These are kids who probably watch broadcast TV, but few have laptops of DSL connections but a whole lot of them have mobile devices,” he said. “With 1.2 billion mobile devices will be sold over the world this year, it’s easy to see that mobile devices will be the connective tissue of modern communications.”

Content is king, goes the adage in Hollywood. “It is a critical link in the chain of getting people to want to get involved,” he said. “Time saving and productivity applications will be the killer apps for some time to come.” But, as mobile devices become more ingrained in our lives–lifeware, so to speak–everything we’re used to doing on the Internet we’ll also be doing on mobile devices.

Tarnopolsky said that content that has done well so far on the mobile platform is generally live or almost-live and short. “Current events, sports and finance are the kinds of things that drive trial and adoption of mobile media today,” he said. “It’s that perishable information, and that’s totally logical.” Brands also drive adoption, he noted. “When you go to CNN Mobile and know Wolf Blitzer is going to be on, and you know and trust him, you’ll feel good.” Short content from music videos to stand-up comedy also does well because it’s consumable in snack-sized pieces. “Personal and relevant will be the two kinds of content that will succeed moving forward–and those are the two words that describe the mobile phone itself.”

The studio’s challenge is to make that content that’s personal, relevant and, of course, good. It has to be easy to find and use, and we’re not really there as an industry. Wouldn’t it be nice if it had DVR functionality like my Tivo at home? And even better if it were free. “It’s clear that the mobile version of “The Godfather” has arrived, unless you think “Chocolate Rain” is as good as it gets, which I don’t,” he added. “At Sony we have boots on the ground around the world so we can try things in different markets.”

The four pillars of what SPTI is doing is original digital content, games, networks and catalog extensions. Catalog extensions is the attempt to mine the existing content sitting in the archive. Minisode Network is “the shows you love, only shorter.” SPTI takes classic shows like “Charley’s Angels,” “The Facts of Life,” “Starsky & Hutch,” all the classic shows, and edit them down to 5-minute minisodes. “They’re eminently consumable on the mobile phone.”

With current TV programming, SPTI is looking for ways to extend the programming onto the mobile phone, with shows like “Rescue Me,” “The Tudors” and others. “What kind of mobile programming could we deploy that people would watch?” he asked. “We’re spending time thinking about that.”

Outside the U.S., in 50 countries, SPTI runs three principal network brands: Animax, AXN and Sony Entertainment Television. SPTI is deploying the mobile version of these linear channels. “These brands are composed largely of U.S. content,” he said. “And we typically don’t have the mobile broadcasting rights, so we acquire those rights or do new deals for new content, or programming our own original programming.”

That project started 18 months ago and they’re in 20 countries, primarily with Animax, with shows anime and other animation content to the 13 to 24 demographic, the ones least likely to have control of the remote control at night and also the ones most likely to feel comfortable using the mobile phone to watch content.

“Mobile games are a no-brainer,” said Tarnopolsky who said they’ve created games for Hancock, Spider-Man and other properties. “This is an obvious way for us to extend our brands and make money in one of the most established areas of mobile.”

Last but not least is original digital productions, what he calls “the forward looking” part of the strategy. They’re trying to create properties with story-driven features that engage audiences and work across multiple platforms. Audiences interact with media in different ways; the native-mobile and digital audiences feel at ease watching a TV show and texting or IMing their friends while they watch. “We’re trying to bring a modern sensibility to what they watch,” he said, “And have what we’ve learned inform the production process. It’s also to do our part to push along our clients and their clients, the advertisers, to attach themselves to new media knowing it’s been produced by a top professional entertainment company.” He noted that big companies like Proctor & Gamble will have a hard time buying against YouTube, “because they don’t know what they’re buying. A new media environment from a company like SPTI is a more likely match.”

“Afterworld” was SPTI’s first mobile product, with 130 episodes telling a hero’s journey in a post -apocalyptic world. The protagonist tracks Russell Shoemaker’s progress home from New York in a world in which people and technology have vanished. The animation was created with mobile distribution in mind, so the shots are tight and the movement is slow, to accommodate the networks and phones of two or three years ago. “And it came with cool stuff on the web, with deep engagement story complements,” he said. “It hadn’t really been done before, and the challenges in producing it and deploying it were many. We made some money, our client made some money and we learned quite a bit.” “Afterworld” was also sold to broadcasters, telcos and other platforms.

The first licensee was TV One in Australia. They operate the SciFi channel and an online sci-fi website. “As the episode was being played, new story elements were posted to the website, to watch consumer patterns,” he said. “As we hoped, when the episode was done, audiences flocked to the website and page views spiked and view times were 50 percent longer than before. The next day, catch-up episodes were available, and people were downloading those episodes, so many that it was just behind “The Simpsons” and “The Family Guy”.”

The next original mobile series is “Gemini Division,” exclusively on CBS.com in the U.S., and co-produced by SPTI which is distributing it everywhere outside the U.S. “This takes the lessons of “Afterworld” and makes a better story,” he said. “We started with a great story – a sci-fi story set 5 ninutes into the future,” he said, noting that the lead is played by Rosario Dawson, “a bona fide movie star.” “She’s a NY City cop who falls in love with a mysterious stranger. “Then things get weird,” said Tarnopolsky who urged viewers to go to CBS.com and find out more. “We discovered with “Afterworld” that 130 episodes was just too long,” he said, “Consumer attachment waned at the half-way point.” For “Gemini Division,” they added more casual games and a graphic novel, ancillary story elements that consumers can interact with.

“And we took it a step further,” he said. “If you’re a registered member, you’ll receive text messages from characters in the story that are clues. If you’re into sci-fi and conspiracies, you can follow the clues down the rabbit hole into an alternative world where you can try to discover what’s going on and help solve the mystery.”

Next up is tackling the funny: “Woke Up Dead,” a modern vampire tale, following a young man who wakes up and discovers he’s dying. He and his intrepid band of friends try to piece him back together.

“Coming full circle on the mobile media industry and why it’s taking so much longer to blow up than we hoped,” he said. “Why is that? It would seem all the pieces are in place for the industry. I think there’s a vicious cycle of mis-aligned objectives among the stakeholders. Consumers don’t want to pay more for content that they feel they can get free, carriers don’t want to risk their networks, and content owners want to get paid every time they distribute a piece of content on any platform. So the advertisers are left out of an industry segment they should be licking their chops over, one where the connection to the consumer is relevant, personal and constant. New technology allows advertisers to know exactly what their consumers are doing. To me, it’s mind-boggling that advertising hasn’t come in sooner.”

“Subscription costs are still high, discovery of content and how to use it is behind, consumers aren’t flocking to the content because of this, and advertisers naturally stay out because the business is small and there isn’t a critical mass of users. That has got to change. Studios always want to make premium content. The networks and cable systems rely on advertising as a core piece of their business. I’d argue that this TV/cable that we’re so used to will, in some shape or form, come to exist in the mobile eco-system, and as advertisers come in, it’ll be the rising tide that lifts all of us.”

“I can imagine a carrier, a studio, a handset manufacturer working together to try to blow the business open,” he concluded. “It could look like pricing data services lower, a studio taking less up front or handset manufacturers providing video-enabled devices at cheaper prices. As consumer interest spikes, advertisers will come running as fast as they can, and then the advertisers will be in this business as well. As JupiterResearch perfects reporting and metrics, advertisers will benefit from that. And the whole industry will move up.”

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Tune In Today at 6:30 pm PDT

I will be interviewed about mobile technology and content on an Internet radio show, Digital Production Buzz. The live radio program is hosted by Larry Jordan, a consultant and Apple-Certified trainer in digital media with over 25 years experience as a television producer, director and editor with national broadcast and corporate credits and Mike Horton, founder and Head Cutter of Los Angeles Final Cut Pro User Group, the worlds largest user group.

The audience for the radio show is editors, cinematographers, producers and directors and I’ll be the first emissary from the mobile world on the show. I hope to discuss why anyone in production and post ought to pay attention to what’s going on in mobile. Listeners will have a chance to live chat or send in questions before the event.

You will also be able to listen to the interview after the fact via podcast.

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Mobile Innovation Showcase: How do you vote?

The last event of MEFCON 2008 (before the closing cocktail party that is) was “Mobile at the Apollo,” an event hosted by Ralph Simon, MEF Americas Chairman Emeritus. Six companies presented products for consideration: mSpot’s Make-UR-Tones; Glu’s Get Cookin’ Mobile Game; Streamezzo Service Manager; Pocketlight’s Artamata; Zeemote JS1 Controller; and Conversational Multimedia’s Muse.

Warren Stringer showed Conversational Multimedia’s Muse that allowed him to add a handwritten message and music to a photo he took, and then send the entire multimedia package to a friend via SMS. The SMS links to the photograph. But wait, there’s more, he said. You can take that same handwritten message and create special effects, changing colors, pulsing colors as he tilted the iPhone. Those effects can be done while the music is playing. Via chat, people can perform in real time, sending gestures along, like the old days of MIDI, in which the performance is a stream of self-expression. It’s very narrow-band and is re-rendered on a very high quality device. There are no limits to self-expression with your friends.

Who would you like to present this device to, asked Simon. It’s the end-user, said Stringer, who said this is a super-distribution opportunity that might generate sales. Possible partnerships include music channels. He is looking money from an angel with experience in the music industry and the film industry long-term. This interactive form of music can also be used to repurpose music, so it’s also aimed at people who own music. They plan to go through Apple’s iTune to sell applications. This company has just been formed, reported Stringer, but he’s been working on touchscreen device like this for ten years.

mSpot was next up. Director of Business Development Bill Gaudreau presented the company’s Make-UR-Tones, a mobile application that allows people to look through a library of songs and cut a ring-tone from that full-track song. They amassed a huge catalogue of full-track songs through music companies. The library is constructed to be as easy to use as possible, with search, browse and playlists as well as “what’s hot” and “new releases.” He demonstrated making a ringtone with a Trina song. It’s under a subscription model. The user can go through the song and can create the start-point and duration as desired. It offers a level of personalization that doesn’t exist yet, offering countless number of ringtones to choose from. It’s currently offered over AT&T and was just released in a BREW version.

mSpot concentrates on mobile music; its core product is radio, running on eight operators in North America and all handset manufacturers. Can you download a ringtone from the radio, asked Simon. It’s possible, but we don’t offer that, said Gaudreau. This is a separate product. We launched it on a handful of handsets a month ago. The current catalogue consists of 250,000 songs, all full-track.

Next is Streamezzo, represented by Naresh (sorry, no last name available). The current state of the application, which he showed on a Nokia handset. In an instant, we can change the look and feel, the order the articles are displayed, with its Service Manager product. This is a convergence of web and mobile technologies, he said. I can change the skin, the order the items are displayed and the look and feel, in an instant. He demonstrated how to change it, by going to the web and choosing another skin (he added a MEFCON skin)., changing the order of the items, and then showed the new look and feel.

Simon asked him who he would pitch the product to. Naresh said they’re already deployed in several carrier networks, in France and China as well as some content aggregators in Asia. What do you say to the operators when you pitch them? asked Simon. Mobile platforms are not scalable, said Naresh, and this application is available on all platforms. There is fragmentation on all platforms, he added, but this is a thin-client technology and is very power- and battery-efficient. “We provide a consistent user experience across a large number of handsets,” he said. It has also been pitched to handset manufacturers and they are already partners with RIM, Samsung and others.

Matt Liszt, vp of strategic marketing at Glu Mobile, presented his company’s Get Cookin’ Mobile Game. This is a mobile video game, said Liszt, who begged people to vote for him. A lot of people say mobile games are played predominately by women, not men, and this one is a cooking game where you pick from a variety of chefs and menus. “We use motion sensor technology which means we use the camera feature,” he revealed. In a demo, he showed how he picked a chef and went into “challenge” mode to show the recipes that can be used. He put a steak on a frying pan and pushed the 5 key to cook it, pushing the 8 key to flip it. He can also flip the steak by flipping the phone. That’s just one of nearly 40 games. Another game is the “Clam Chowder,” where your sous-chef has thrown different ingredients into the pot, so you have to smack away the inedible food items, also by jerking the phone. One more example was Escargot, a memory game where within the shell there are numerous escargot. You have to shake out the number of escargot, by shaking the phone.

How does it work, asked Simon. Is it the camera that captures the movement that activates the code? Liszt said that the mobile gamer isn’t just a gamer – if someone drops $500 for a phone, he or she wants a cool factor. This is a “dude, check this out” feature. Something like this can showcase technology, and let them rationalize spending money on the handset. Is this an attempt to branch out to a new demographic, women? Yes, it does skew slightly more audience, and we think women are the biggest growth audience [for games]. But guys also like to cook. This is a two-fold value proposition: clearly we like to use technologies like this to help sell, and it also reaches out to women. This game will be released in the summer.

Rob Podoroff (sic) from Zeemote was the next presenter. He showed the JS1, the size of a pack of gum, which connects seamlessly to the phone and allows joystick play on the mobile phone. He demonstrated playing games with the JS1 controller, in which he controlled a helicopter flying with it. The Zeemote controller allows you to do simultaneous moves, unlike the cell phone. He can also control the helicopter in multiple directions. This is a huge improvement in steering. But this isn’t just for action games. He next showed a casual game, Perplexed. The big advantage is the screen never moves. The controller fits naturally in your hand, and you don’t have to move the screen for game play. The unit uses two AAA batteries that provide 40 hours of game play. The company provides an SDK to the game developers, and they’re working with the top ten game developers who are working on enabling Zeemote controller. It’ll cost between $30 and $50 games depending on the number of games it’s bundled with. It can also be incorporated in the phone at the manufacturer level. The end customer is the person who plays the game, but the need is to establish relationships with carriers, handset manufacturs and game developers, he said. The company plans to announce several partners in the near future. Currently it’s BluTooth, and the SDK is Java-based, but the company will be announcing SDKs for several different operating systems.

Last but not least, Pocketlight president Sherwin Zadeh presented Artamata. He showed a flashlight built into the phone that he could use for signalling SOS in Morse code. Simon asked about the origination of this idea. The idea, he said, was that he was working on the Motorola Q’s advanced features, and what struck him was that as much as we work on high-tech capabilities, consumers want practical tools. He realized that the Flash that alot of these phones have with the cameras are powerful. Pocketlight is a simple concept, to use that Flash as a flashlight on the Q. As a funny thing, as much as we get into advanced communications with SMS and chat and so on, if the cell phone towers go down, we’re all screwed, so you could use a flashlight to send Morse code messages. Simon asked him what handsets you can find it on. The Motorola Q is the only handset officially supporting it, he said. “I’m glad Motorola invited me instead of suing me,” Zadeh joked. “I hacked into their hardware layer to do this.” Zadeh reported that he created it for fun, but it’s been picked up by a lot of blogs. It’s a simple concept. The phone is always with us, and I’d like to see more innovation with things that people want to have. I’d love to see a compass, said Zadeh.

Now participants were invited to text in their preferences for which innovation is the best.

The winner won’t be announced for a few hours, so I invite you to vote for your favorite…I’ll report the winner tomorrow.

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Is Ad-supported Mobile Content Viable?

Ah yes, this hot topic. Something can be extrapolated from the fact that, in the MEFCON agenda, at least, four people are listed as supporting the above query, while only two have offered themselves up to argue against ad-supported content.

The “pro” team was led by Ujjal Kohli, ceo of Rhythm NewMedia with Nicholas Covey, director of Insights Nielsen, Niren Hiro, vp of biz dev from AdMob and Roger Wood, SVP/GM,Americas, Amobee.

The “anti” team was led by Patrick Kelley, Impact Mobile., with John Fletcher, analyst at SNL Kagan, Sean Rosenberg, director of mobile marketing at RCA Music Group and James Cannella, president of Digitainment Consulting.

Each side had ten minutes to present their case, and the “pro” side started first.

Kohli started by saying that no media flourishes without ads, from live theater to radio. He said he’ll talk about all the stakeholders in mobile: advertisers, operators, content creators and customers. Covey spoke first about consumers. What consumers don’t want, he said, was to pay for content because of expense. What will we do to monetize folks who will never come onto this platform? Ad-supported content is a way to monetize it, said Covey. The willingness to pay for entertainment has increasingly declined over the last century, he added. Advertisers’ POV was repped by Wood of Amobee. Wood said reach and frequency are a consistent and dominant factor in the decisions of advertisers, and mobile has a great advantage in this regard. There are inherent advantages for advertisers to buy on mobile and those advantages will become more clear over time.

Niren at AdMob spoke about the reasons he thought carriers would have to embrace advertising. In saturation markets where penetration is high, the only way to grow ARPU is through new sources of revenue, and advertising is one such source. Internet access through the phone is another way to grow ARPU, and advertising drives discoverability. That will help grow adoption numbers. So advertising can be a key ingredient in growing ARPU. All-you-can-eat data plans will grow in importance, and pricing will thus stay flat. One of the few models that grows with bandwidth costs is advertising, which helps carriers to stay a “smart pipe” and retain audiences through innovative services.

Kohli ended with the idea that ad-model is also positive for content producers. Many have a large amount of content and customers won’t pay for all of it, and they might as well monetize that. Also, new content providers who may not be able to cut content deals with carriers can monetize their content via advertising.

The “anti” team made their case with a PowerPoint display. Rosenberg pointed out that consumers like things for free, low-cost, without barriers for entry, but that won’t make sense. Content is copyrighted material, and advertising isn’t enough to cover the gap of its value. Current business models won’t allow fair compensation for copyright owners. How are these people getting their money back? On TV, ad revenues cover operating costs as does TV, but not performance rights or synch license. It doesn’t turn into actual revenue generation for the copyright holders. In mobile, the same thing is going on, but the carriers want 50 percent of everything going on. Mobile has a smaller addressable audience. It’s not an advertiser-friendly environment, said Rosenberg.

Ninety percent of mobile phone ARPU was from voice or messaging, he reported. He pointed out that, for landlines, consumers formed a National Register for Do Not Call. Sure, the phone is on all day long, but consumers have proven that it’s a one-to-one communication method not open to advertisers.

How will we target the youth market? U.S. youth loves mobile media; we think there are 17 million people we can get to in that demographic, whereas MTV gets a much larger segment of the key demographic that advertisers are going after. The numbers don’t add up, said Rosenberg. Content owners are getting fractions of a penny for ads served up; with a full penny rate, they need 100 million streams to get to $1 million of revenue. Ouch. Avril Lavigne had the most video streams ever on YouTube: 84 million, and another 20 million songs were streamed on MySpace. But it’s nothing compared to the revenues of download. Yes, mobile is ancillary but it doesn’t cover costs and won’t make a worldwide star.

What works now? A sponsorship model works, where it’s still free to the consumer. Brands pre-purchase bulk content at a fair market price that is wrapped with their advertising message. Wholesale discounts may apply and no cost is passed on to consumers.

In conclusion, the mobile phone is a personal and private means of communication which will limit the impact of advertising. How can you target beyond geography? Audience has too far to grow for a sustainable market. Qualifying the buyer and audience is neaqr impossible for targeting mobile advertising.

Next came the rebuttals. Kohli pointed out that ads are being streamed and demographically targeted in the U.K. He stressed that he’s not talking about replacing any existing model but adding to it. Why not also access this big bucket of revenue which is advertising? ARPU goes toward voice and text and nothing is left, said the anti team; that’s exactly correct and now consumers don’t have money to spend on anything else. Kohli also reported that studies proved that if the ads are done right, customers are happy; customer satisfaction run at 94 percent because the consumer is getting free content.
Covey said that talking about the National Do Not Call List was relevant; Nielsen has asked people what kind of advertising they want on their phone. They’ve learned that one-third of mobile users are open to advertising for free content. With unique capabilities to respond to ads targeted at specific demographics, advertisers are interested, he added. For current artists with hot titles, there is a revenue model that works, but there are plenty of artists not getting $1.99 for a download. Woods also pointed out that there are incredible generational differences in how people enjoy media. People born between 1944 and 1960, they have one relationship. Those born in 1990 onward are almost unrecognizable in their media consumption preferences. The aspect of the man-machine interface, how the mobile phone displays entertainment is evolving in 12-month cycles, said Wood. “You’ll see a rapid move to a host of devices with aspect ratio and interface more conducive to entertainment,” he said.

Niren made the point that the inertia of the music industry is a bad example for mobile entertainment. He used to be in the music industry at MTV and noted that content owning companies are afraid. Ultimately, he said, we know what happened with radio and music. Advertising will play a role – that’s clear, he said. AdMob does a lot of business in click-to-call to, for example, hearing a message from their favorite artist. If you add up companies represented on our team, we reach 25 to 30 million unique users, so this is a real business with real opportunities. And advertising comes with that. Look at what is happening in advanced markets like Japan and Korea, at the games industry which has been disrupted by the ad model. In summary, said Kohli, it’s great for customers looking for free entertainment, it’s terrific for advertisers who see click-through at least 5x as good, and for content publishers who want the widest possible audiences. Why go after one bucket of revenue when you can go after two?

The “anti” rebuttal group said that content isn’t free – the consumer has to watch an ad. We’re talking about demographics said Kelley, who noted that the Federal government is taking a strong look at this. By introducing a commercial aspect, individuals not of legal age, children have cell phones and many organizations are leary. It will affect all of us in the value chain, he said. We don’t know who the ad is going to, especially with a family plan. Verizon can’t share the information nor can their aggregators. There is no reliable way to target age groups reliably. Geographically, an area code doesn’t mean that the consumer lives in that area. Intellectual property rights owners have spent millions of dollars to slow down the money lost through peer-to-peer distribution. To try to suggest to buyers that it’s okay to receive content for free is [irresponsible]. We have laws, he said, and someone has to have rights in this chain to distribute the content. Does each advertiser have to purchase sub-license rights?

Fletcher also noted that with regard to ARPU, people buy phones to communicate with other people, not to play games. Cannella pointed out the difference between sponsorship and advertising. Direct sponsorship is a one-to-one brand/artist/studio relationship and the artist retains control over who gets to sponsor his/her content. Doing the ads right is very subjective, he also countered, because the Tivo generation has figured out how to go beyond ads whether they’re done “properly” or not. Carriers are not going to give up information to advertisers; if anything they will continue to restrict it.

In America we’re spoiled with all our multiple devices, said Rosenberg. Advertisers isn’t going to fix that for everyone. It’s a cultural difference. Nobody has figured out a viable model for online download, so mobile has a way to go, he added. He also questioned the results of all those click-throughs. The click-through rates on online has dropped, but 6 percent of the people are responsible for 90 percent of the click-throughs, he noted, so you’re targeting the same small group of people over and over again. He also pointed out theh problem that spam became with everyone opting in.

Questions from the audience attacked both sides. “Go straight to the jugular,” encouraged moderator Andrew Bud, MEF Global Chairman who earlier said he hoped the event ended in fisticuffs. Attendees had only 5 minutes to ask questions of each side.

QUESTIONS FOR THE “PRO” SIDE:

Do you really think anyone will make money besides you in mobile advertising?

Niren said that many companies were surprised at how much money they could make. There are plenty of indicators to suggest that they will make money.

Isn’t ad-supported revenue another way for network operators to stick their hands in our pockets?

Kohli said that CPM rates are running 5x more than for TV. Advertisers don’t stay long unless they see a real revenue model.

What’s the business model that could power an amount of advertising?

Kohli pinpointed the models as call to action and brand. Companies like AdMob, Amobee have demonstrated some great call-to-action and brand models. Both pieces of the advertising eco-system lend themselves to this model.

QUESTIONS TO THE ANTI TEAM:

Couldn’t you agree that advertising is part of a package of revenue models?

Yes, but is it a viable model today? No, it’s an ancillary model that has yet to prove itself. Yes, there is some money there, but it doesn’t equate to a rounding error. The numbers don’t add up.

What do the numbers look like on the content side when you eliminate the traditional music process? What happens when you eliminate that and look at content made for mobile?

Work for hire, you can do whatever you want with it. If you out-right own everything – Elvis and Pink Floyd are as popular as ever. You might have older demos who are ingesting things like this. But there is no example of made-for-mobile working.

If you see the end of per-track transactional model, how will that work?

There aren’t enough impressions in this space.

How is it that buying out a catalogue from a content owner and giving it away to users for free and monetizing it via advertising isn’t entertainment? That’s what they do in Japan.

If you go to YouTube now, thousands of advertisers gravitated to one model. A specific campaign around one artist, one song – a sponsor might say they want their name and logo against an Avril Lavigne tour. When you’re serving random ads up, it [doesn’t work].

Finally, the audience was invited to text in their vote. With a two-thirds majority, the pro-advertising team won the vote. How would you have voted?

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Producing and Monetizing Broadband Content

Digital Hollywood, May 5, 2008–Go shoot me – instead of going to a panel on the hardware and other technology at the base of enabling mobile TV and video, I went to one on producing and monetizing online or broadband content. Why? Broadband content was considered to be a wild and crazy thing not that long ago. Now, still wild but definitely not crazy. Although the path to mobile TV success may play out quite differently, it’s always instructive to learn from those who have gone before, even if it’s measurable by months not decades.

As I hoped, the panel was very instructive. First, the panelists represented a great group of new online studios–Vuguru and MyDamnChannel–that aren’t that different from film studios: creatives pitch ideas that subsequently get developed. Vuguru business executive Jane Hu pointed out that rather than getting a greenlight from an advertiser first, they try to bring all the pieces of the puzzle together at the same time. MySpace director of marketing & content Cristian Cussen reported they are piloting programming, spending on average $15,000 for three episodes, then internally reviewing them to see if they want to move forward. Then they take the episodes to advertisers to see if they can sell it and move forward. “It’s a low-risk way to proceed,” he said.

YouTube content partnership manager George Strompolos noted that although the company is pigeonholed for its cat videos, they partner with content creators of all kinds, including professional. “It’s a performance-based model,” he said. “If there are a lot of views, there is significant ad revenue.” Some content creators sell their own ad inventory on YouTube. With overlay ads, the content creator can determine who’ll be there, and it opens doors for selling ads.

Speaking from the advertiser point of view, Lori Schwartz, who is svp/director of emerging media at Interpublic Emerging Media Lab, said that ““once again, it’s the Wild West with no standard rules for engaging online” “It’s very confusing and a lot of my colleagues are a bit overwhelmed on who to go with – where does my budget come from? And especially premium content – where do I get that from? If I’m not from the broadcast side of the agency, I don’t have dollars to create content.”

Heavy.com vp of entertainment Jimmy Jellinek reported that they have found an extremely successful advertising model. Instead of cluttering up the page with buttons and banners, they deliver one brand impression, wrapping the player in that, increasing click-through dramatically. And it doesn’t interfere with the video you‘re trying to watch

MyDamn Channel’s Barnett said “it’s about not trying to overwhelm the audience,” and reported that the site is now lucky enough to keep people for up to 4 views per visit “because we’re offering a smaller amount (of videos) but higher quality. In the end, it’s brands, actors and characters that getaudiences and revenue. We passed 20 million views so we’re able to start talk advertisers – we’re bringing stars and consistency.”

Moderator Daniel Harris, chair/CEO of Mediapass Network asked what format the panelists are streaming in. Heavy.com’s Jellinek said all of them but noted the programs work best in Windows, not Mac. Hu noted that the various distributors take responsibility for encoding. But Flash was hands-down the most common format for distribution.

Next came questions from the audience. The conversation quickly turned to convincing wary advertisers that broadband content was worthy of their dollars. Ms. Schwartz talked about the benefits of a portal like Heavy.com. “When you’re talking to an advertisers about Heavy.com, it’s a specific portal where you are editorializing the content so I know who exactly will be there,” she said. “In this hyper-syndication model where you put video on every site, it’s harder for advertisers to know who their brand will be exposed to. Hyper-syndication loosens the brand.”

Discussing the download or transactional model versus ad–supported, Hu said “you have to offer something slightly different to get them to pay for the content. We did a deal where you could get the entire season plus some extra stuff for $9.99 from Amazon.”

Bottom line, broadband content creators and distributors are still trying to figure out which business model works and how. Sound familiar? MyDamnChannel’s Barnett brought the conversation back to why so many people are drawn to creating–and watching–broadband content. “We have Harry Shearer – he knew we’d sit down and agree what he would do and after that point he’s have total creative control,” he said. “Having done that, the networks are calling and want deals for content. But the onlyway it’ll work is if it’s independently created for this medium. The greatest thing about where we are now is the freedom.”

That’s another conversation for mobile content creators…

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Filed under Content, Events, Monetizing Mobile, Uncategorized