Improved handsets-with faster processors; larger, higher-resolution screens; and high-speed Web access-are rolling out as wireless service providers finally introduce third-generation, or 3G , technology to the U.S. By 2006, technology experts say, about 70% of cell phones will have built-in digital TV receivers.
The entertainment industry is taking advantage of the new offerings, with cell phones becoming a lucrative new method to market and distribute content.
Record labels are growing "ringback" tones, which have soared to a $3 billion worldwide industry and are expected to make up 12% of total music sales by 2008, according to a study by Baskerville/Informa Media. Cell phone providers are rolling out ringback tone services that would replace dial tones with songs as callers wait for a caller to pick up.
At the studios, News Corp.' s 20th Century Fox signed a two-year worldwide deal with wireless entertainment publisher Sorrent to create mobile games, ringtones and other content based on its films. Other studios like Walt Disney Co., NBC Universal's Universal Pictures, and Time Warner's New Line Cinema and Warner Bros. have also signed individual deals to promote their films via content distributed onto mobile devices.
short version of `24'
Among the major broadcast TV networks, News Corp.'s Fox has started to experiment with producing what it calls "mobisodes," or short versions of TV shows. Fox is partnering with Vodafone and Verizon to distribute "24: Conspiracy," an original live-action series based on its hit show "24." The 24-episode series of 1-minute shows is available to subscribers in 23 countries. Networks are also gearing up to begin broadcasting live TV signals to cell phone screens. But so far, Sprint Corp. and AT&T Wireless have been the only U.S. carriers to offer live TV on phones.
All this is good news for marketers looking to promote their brands to customers. And industry observers expect advertisers will quickly find an audience for their wares.
The media marketplace in 2005 will be transformed by a "steady disappearance of the mass market, replaced by an ever-growing number of micromarkets that cater to the needs of specific groups or individuals," Tony Kern, deputy managing partner of Deloitte's Technology, Media & Telecommunications practice, predicts in a media industry report. "New devices and media will flourish, along with new forms of advertising, including embedded advertisements in video games, software and even mobile phones."
The broadcast of live TV also will mean that traditional 30-second spots will have a new outlet for exposure. Entertainment content could start seeking promotional partners. Industry observers say that it's only a matter of time before advertisers start launching their own branded channels of short-form content on phones, turning mobile devices into a new outlet for branded entertainment.
"That's absolutely where things are going," says Peter Levin, a partner at Quattro Media, a Los Angeles-based entertainment company that has brokered cell phone content deals in Asia for such clients as animation house Wild Brain. "You will see free sponsored channels. You'll have access to a suite of content offerings where the brand is embedded in the content and also the template of what you're looking at."