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Digital Hollywood: Mobile Commerce & Content

Santa Monica, CA—Last night I attended an opening event at Digital Hollywood, namely the party celebrating nominees for the upcoming Mobile Excellence Awards. At the Loew’s Hotel on the beach, guests were treated to a spectacular sunset, a view of the neon-lit Ferris Wheel on the Santa Monica pier and, of course, drinks and hors d’oeuvres. Enthusiasm is high for the actual Mobile Excellence Awards, coming up on December 8th.

Today, I attended a panel on Mobile Commerce & Content, moderated by Steve Bradbury, GoTV vp of content strategy and business affairs and featuring panelists Cheng Wu, Azuki co-founder/chair; Brian K. Johnson, senior vp, Americas and Asia Pacific for mBlox; Larry Berkin, vp of ecosystem and corporate business development for ACCESS Systems Americas; Virgin Mobile USA director of brand development & partnerships Ron Faris and AirPlay Network chair/CEO Morgan Guenther.

GoTVs Steve Bradbury

GoTVs Steve Bradbury

At Loew's Hotel

At Loew's Hotel

Sorry to say I missed the first part of the panel but came in at a perfect moment: when the discussion turned to advertising. Moderator Bradbury asked panelists what advertising model will work in the next 6 to 18 months. “Now it’s the original model of TV: we’ll give you content to get you from one set of ads to the next,” he said.

Guenther agreed with the “TV model” assessment and pointed out that his company’s model was focused on the live event. “When there’s a pause in the action, you look at the mobile phone and match it up with what’s happening in movie theatre or TV screen,” he said. “It’s all abut pacing and what the customer is anticipating.”

Virgin Mobile USA’s Faris admitted that his company doesn’t have the scale, but instead has a niche focused on youth. “Reach and frequency are tenets of advertising, but to bring relevance we’ve had to bring depth of experience,” he said. “We’ve looked at different ways of advertising. When we launched Sugar Mama, a model where you watch content in exchange for free minutes, we didn’t thave the scale to be able to compete. We were up against Google, AOL and so on. We tried to bring in WAP banners and text blasts to bring up the numbers. They were great for reach, but for depth of engagement, which is what we’re using, we were reincarnating things that annoyed us on the web. The WAP banner is nothing more than a banner ad. Text blasts are nothing more than spam. Geo-targeting is great but why do I care? If I get a text blast for Nyquil and don’t have a cold, why should I care? From our perspective, you have to understand what’s relevant and create a deep engagement. I don’t want to keep going in this direction – we have to move into a sponsorship model.”

Berkin pointed out that everyone is in the early stages of mobile advertising. “I come from the download pay- for-application model. It’s a scale business.” He also revealed that ACCESS Systems Americas has created a widget platform that’s ad supported that will roll out on smart phones across the world.

Johnson noted that the text message ad-supported model has taken off. “We’re watching that carefully,” he said. “We see a big increase in free-mium, where you get something for free but maybe you’ll pay something more if you like it. Micro-payments are our biggest growing segment, for example to pay 99 cents to send someone virtual flowers. A mixture of micro payment and ads will pay for content.”

Azuki’s Cheng said that “the mobile ad ecosystem is completely fragmented and totally isolated from advertising.” “Mobile is different from desktop,” he said. “You can’t put 30-second ad for 30-seconds of content. Advertisers have an inventory of 30-second spots, so their resources aren’t fitting the mobile ecosystem.”

One panelist noted that “before we see a truly ad-funded content model, I’d like to see a flourishing one online. “We’re closer to having that scale in the online context, for music in particular,” he said. “There have been attempts for fully ad-funded models but the numbers don’t work. Content costs are steep, and we’re a ways off until we see truly ad-funded mobile content.”

The last word came from Bradbury who spoke about metrics. “Metrics in the online world stink. The numbers are inconcistent. Metrics have to be much more standardized and effective. The same thing in the mobile space, so you can go to a media buyer used to seeing things in a certain way and give them numbers they understand in order to justify putting money into a mobile buy. Then you’ve got a viable campaign. But, for now, metrics are still a big issue.”

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Mobile TV: Making It Through to the Next Round

This panel, moderated by The Hollywood Reporter deputy editor Andrew Wallenstein, included Telescope executive chair Jason George; Endemol USA SVP, digital media and branded entertainment Jon Vlassopoulos; GoTV Networks EVP/studio chief Daniel Tibbets; and Veeker co-founder/COO Marcus Yoder.

I confess, I came in late to this session because I just finished a long interview with L.M. Kit Carson, a filmmaker and journalist who shot short documentaries in Africa using the camera on his Nokia N93. I’ll be posting that shortly, so look out for it.

Wallenstein asked if there’s anything in the league of American Idol in terms of encouraging texting or participation as an adjunct to a TV experience. Vlassopoulos pointed out Deal or No Deal, and another participation show on BET that had a high level of interactivity participation. “The most exciting thing is that people are willing to get out their device and do something which is very significant for the advertisers,” he said. “We know American audiences like participating, so we know there is excitement. We’re working out the business models to connect carriers to the shows.”

The networks will be hungry for new revenue streams and the model will start to emerge, said George. Yoder said, however, that premium is still far off. “We’ve been trained as consumers that you pay a fee and you get your content,” he said. “Europeans are used to have to pay for everything.” The idea was bounced out that, for the 200 million texts that came for “Idol,” you could send them something down the pipe aside from an acknowledgment including a free use of the data for that vote. Pushing the carriers to do that open the opportunities for other sponsorships.

Mobile is a great device to get someone to perform a simple action, George added. A lot of our broadcast clients are interested in how to get people off TV to online and mobile and find rewards there and then drive them back to TV.

Vlassopoulos agreed. “TV is blind in terms of who’s watching,” he said. “If you encourage people to interact, you have their phone number and information. Everyone is asking the question about how digital will impact [traditional media], the death of the 30 second spot. Live programming will have a resurgence because it’s Tivo-proof. Having interactivity within advertisers spots, and moving people 360 to the web and back lets you know who they are.”

Wallenstein said he thought that momentum was lost over interactive applications; that broadcasters had tried and given up. Yes, broadcasters have slacked off, said Vlassopoulos. “I think there are some things on the back-end that have nothing to do with consumer or broadcaster demand that need to be sorted out,” he said. “The momentum is very much there. We’re trying to feed that demand as soon as possible.

Does it boil down to advertiser-demand being the main driver, asked Wallenstein, who said there was a schizophrenia between concern over disruption of traditional channels but weren’t ready to take the leap. What do you do to get them over the hump?

Tibbets agreed it is a Catch-22. “We have to get enough eyeballs in mobile to get advertisers to pay attention,” he said. “We can’t be mobile-centric, we have to pay attention to online, to TV. How we engage advertisers, it’s about brand integration, original content production – beyond mobile, what kind of eyeballs can I aggregate. If you can create the right brand identity and have the reach, that makes sense to them.”

GoTV started with P&G brands and as moved beyond that. He reported they’re working with a luxury car manufacturer but the series doesn’t have a car in it at all. It’s about brand identity, and the idea is to put it across as many broadband channels as possible. Yoder pointed out that he’s working with an athletic clothing manufacturer that wants user-generated content, as a jumping off point for interactivity. “If they do anything with the UGC, that’ll be icing on the cake, but the majority of the branding will be on a WAP page.”

Wallenstein asked for panelists’ opinions about MediaFLO. “It’s retro to re-purpose a linear feed, but maybe that’s how you get the soccer moms in,” he said. “What do you guys think of this market strategy?” “It’s clearly a long term play,” said Vlassopoulos. “It’ll come down to how well they play with the carriers.” “It’s still a marketing issue,” agreed Tibbetts, who reveals that Qualcomm is one of his investors. “The reality is that MediaFLO from a technology standpoint was to take the heavy lifting off the carriers. Can the network handle the volume of VOD or even streaming media? It was never built for that purpose. I have MediaFLO on my phone and I find it great when there’s a live event. If there’s a game on, and Comedy Central does “The Colbert Report” and if you don’t have access to it in any other way, it’s great and it’s fantastic quality. That’s great – but it’s not the final solution. The on-demand model is compelling when you want something specifically. You don’t have to wait for the bit you want or for the commercial to end.”

“It’s portable TV, so hopefully there’ll be more innovation on the VOD side,” said Vlassopoulos. “It’s a tricky model. With WiMAX, and other technologies looming…if you have your nice connected device, it’s more like a mini computer, then the value of MediaFLO evaporates somewhat.”

Is iPhone a good game changer? asked Wallenstein. Is there some other game changer you are all waiting for? The iPhone is just like the Internet on your phone, said Vlassopoulos, with a smaller computer screen, and that’s a game changer. Tibbets says the Internet browser on the phone, not WAP, is the future, and the iPhone did that. “WAP is dead,” he said.

Wallenstein asked panelists if conglomerates get it. Yes, said Vlassopoulos, who noted the close relationship with NBC. “They’re in lock-step with us in moving forward,” he said. “When we started in 2005, we had to yell loudly that it wasn’t just happening in Europe. I don’t know how my colleagues are faring with cable channels.” Tibbets noted it’s fairly recent that the big media companies realize that mobile is important. He quoted Peter Chernin who said that Fox has to regard mobile and broadband seriously. People at the media conglomerates get it, added Tibbets, but do they have the right infrastructure to deliver? Yes, they’re getting it as they experiment, added Yoder, who said that the media conglomerates are bringing on younger, more hip people. “In LA, 14 people at the local station has this in their bag of tricks when they’re out selling local,” he said.

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