Will cell sell?

Despite the fact that the technology supporting cell phone programming is still in its infancy, kids entertainment content companies are hooking up with wireless publishers left, right and center and stampeding into the untried market.

There are many reasons for this...
October 1, 2000

Despite the fact that the technology supporting cell phone programming is still in its infancy, kids entertainment content companies are hooking up with wireless publishers left, right and center and stampeding into the untried market.

There are many reasons for this eagerness to be the first out of the gate (one of which could be that many mediacos feel they missed the boat on early Internet initiatives that were reaping investment millions for forward-thinking dot.coms), but perhaps the most compelling element for early players is the overwhelming market presence of cell phones and PDAs in international territories-and consumers’ willingness to pay for content that personalizes their device.

‘There are 12 million kids in Japan right now who are getting a download everyday of fantasy character icons for US$5 a month,’ says Marvel Enterprises CEO Peter Cuneo.

Unreliable telecommunications systems are behind the explosion of cell phones in Asia. ‘The land-line phone systems in many Asian countries are lousy, but it’s easier to leapfrog the problem by putting up towers and having everyone on portables,’ says Cuneo. ‘They’ve avoided a whole step in the telecommunications evolution.’

By the year 2003, Cuneo estimates that there will be a billion users of various portable communication devices around the world, and that these will be customizable in terms of the creative entertainment content delivered to them regularly.

Stepping up to the plate to provide that programming, Marvel has signed a deal with Finland-based Riot Entertainment, a mobile service developer backed by cell phone giant Nokia Ventures, to develop games based on Marvel’s considerable gang of 4,700 comic book characters. The first in the pipeline is a one-dimensional text-based title called X-Men the Wireless Game, which will roll out through Asia and Europe this month.

Built around SMS (Short Message Services) technology, the game progresses via e-mail messages sent back and forth between the cell phone user and a game system set up on the Net. Players become mutants and are assigned tasks and mock-battles by the system that are designed to hone their special skills. Eventually, they will get to take on more substantial baddies from Magneto’s arsenal. Riot, which is responsible for selling the service to telecom companies worldwide, is negotiating with several U.S. carriers, and the game should be available State-side by the end of 2000. The game is being promoted in Marvel comic books and on the company’s website, which gets a million hits a month. Marvel and Riot are also developing icons, music and community and chat forums to make the service more appealing to consumers.

A robust array of offerings is essential to the business model that Marvel and Riot have cooked up for the project. Not only do they have to convince the telecom companies in each territory to pick up the service, but consumers then have to like it enough to pay a US$5 to US$10 monthly fee.

Turner Broadcasting International is taking a slightly different distribution approach with the Q4 2000 European launch of its Cartoon Network World mobile service. A lineup of SMS games, toon trivia, character screensavers and icons has been licensed to third-party mobile portal Mviva, which is owned by AOL and Carphone Warehouse-Europe’s largest mobile phone retailer (with 320 stores in the U.K. alone) and vendor of four wireless services. Mviva will offer the Cartoon content (as well as other programming services that it has licensed) to its subscribers for no charge in an effort to corner an even larger share of the European cell phone pie.

So far, the financial returns from mobile phone content development are marginal, and the focus is on research and development rather than reaping significant profit.

However, according to Mitch Lazar, Turner International’s VP of business development for new media, a new revenue stream is only about 18 months off. ‘The advent of new technology that makes 2-D animation possible will allow us to take advantage of a new source of revenue-which is advertising,’ he says. ‘I believe that the business model is gradually moving towards an Internet model, which we would all feel more comfortable with.’

Turner is virtually a wireless programming veteran since it has been offering CNN Mobile branded content since 1997. Today the service is carried by 26 operators globally, with about 69 million people accessing it. Having this established carrier cache could make it easier to license Cartoon Network World globally after the launch on Mviva. ‘The operators we deal with are really keen to get the entertainment products because in a lot of areas, teens and tweens are a very important demo for wireless products.’

To further interest that key demo, Fonerange has signed on to manufacture a range of Cartoon Network character-branded cell phone accessories, including phone covers, character arials and phone pouches, which will launch in Europe before the end of the year.

Kid and tween users are obviously central to the success of Fox Kids Europe’s new WAP service, which has been out on the European market for a few months. In addition to horoscopes, news and reviews and a choose-your-own-adventure space-themed game, FKE is looking to add messaging, virtual wallets, personalized TV schedules and more games to its roster of wireless activities in the coming months. ‘Our research shows that kids are already using mobile phones as interactive devices-they’re the principal senders of SMS messages-so it’s a very natural step to expect that kids will migrate to use WAP,’ says Natalie Hugh, FKE’s managing director of on-line and interactive.

The new content is accessible to users who have a WAP-enabled phone (and available for free via special website, and Mviva will also carry the programming. Hugh says offering free content now, while it’s cheap to develop and can be produced in-house, is the best way to attract loyal users that can be converted to subscription when 2-D animation technology makes the programming more alluring. ‘It’s really costing us very little to develop the WAP content that we have and to maintain it,’ she says. ‘In the long term, we’re looking at some kind of subscription-based system, but that will only happen when kids can play Game Boy-type games and watch cartoons.’

Warner Bros. is one entertainment company that seems to be holding out for the golden pastures offered by 2-D tech. The mediaco’s New Media division recently signed a deal with San Diego, California-based PacketVideo Corporation to develop four Looney Toons animated series for wireless platforms. Warner Bros. was unavailable for comment, but PacketVideo’s CEO of programming Lauren Cole says that the two companies are doing research to determine which Looney Tunes characters resonate the best with wireless users in the European and Asian markets, as the digital toons will roll out internationally first. Timeline plans for the launch of the service are still being hammered out, but Cole estimates early 2001 as likely.

The North American market is proving to be a tougher nut to crack. Due to comparably excellent telecom penetration and service that’s handled by a wide variety of companies, as well as solid Internet entrenchment, wireless devices tend to take a backseat in terms of both communication and digital entertainment delivery.

Another factor contributing to cell phones’ second-banana status State-side, according to Turner’s Mitch Lazar, is that North American users are charged to send and receive calls (Europe and Asia run on a ‘caller pays’ system), making the whole concept of using mobiles restrictive. As a result, there’s less of a push to implement WAP-enabled phones as the continental standard.

With so many new players jumping into what is so far a small market, it seems likely that content companies will increasingly have to work harder to make their programming stand out-especially when they start sharing distribution outlets. Fox Kids Europe’s WAP content and Turner’s Cartoon Network World will share the Mviva portal.

The key to surviving, claims Lazar, is an integrated approach in which wireless content connects to other forms of media. ‘It’s a cyclical business that I refer to as user cross-pollination,’ he says. ‘The bottom line is that in order to stand out against your competition, your content needs to be compelling and it needs to be offered in many different formats so it’s always accessible to the consumer. That’s the only way money’s being made these days, and the wireless space is no different.’

About The Author


Brand Menu