Early next year one mobile operator will launch an 80-episode soap opera to be aired exclusively to mobile phone users in the first sign that entertainment groups are starting to target the mobile phone in a big way.
Endemol, the TV production company behind Big Brother, is in final discussions with mobile operators to roll out its first mobile phone soap early next year. The aim is that mobile users will pay as much as Euro 5 for an episode - a story board of five colour picture messages - which will be sent to mobile phones.
The drama, which was put together by top soap writers and shot on Ibiza, is aimed at the early teen to late 20s age group. With the option for users to interact by choosing different endings, it is hoped it will woo more female users into mobile data services.
But it is also indicative of the growing financial investment content providers are willing to put into mobile, in contrast to broadband websites. Endemol has shot and financed the soap opera without a firm commitment from any mobile operator. Instead it hopes to reap its production costs - and make a profit - by sharing revenues with mobile operators.
This example also highlights the growing power of mobile operators in the content game. In Japan, operators such as the dominant DoCoMo have typically given away 90 per cent of revenues to content providers in a bid to encourage the proliferation of new services. Vodafone, which was later into the content market, typically retains 60 per cent of revenues for itself. Despite these lower financial returns, many content providers are clamouring for the opportunity to work with mobile operators.
With the European ringtone market alone worth an estimated Euro 1bn annually and growing, content providers are eagerly looking for the next big thing. As mobile operators start to upgrade to 3G networks, data-hungry services such as picture messages or even video clips are likely to move further into the mainstream. MTV Europe has signed deals with 3, the new entrant mobile operator pioneering 3G technology, that allows users to see video clips of bands that have performed on the channel. Simon Guild, chief operating officer, MTV Europe, believes the emerging mobile technologies offer significant opportunities.
"Mobiles could become a great way of distributing shorter pieces such as music videos," he says. "The more we can play around with it and the more people can do with it, the more acceptable it will become."
This contrasts with the "broadband" internet market which, despite faster speeds and much larger screens on PCs, is failing to attract as much interest from content providers. The issue of how to stimulate broadband content was the subject of a recent DTI-endorsed report. But Endemol is not unusual in in creating bespoke mobile content but mainly repackaging existing material for its pay websites.
The reason is purely financial. Endemol generates around a quarter of its total revenues from mobile services such as text voting and gaming and this proportion is growing. Although it gleans some revenues from the web, these are dwarfed by mobile. "We don't make a lot of money from broadband, although it's enough from an emerging market point of view," says Peter Cowley, director of interactive media at Endemol. "We've done it partly just to get a payment model on broadband."
On mobile, by contrast, the payment model is already very well established and it is this that is luring the content providers. "Mobile is just easier," says David Stansell, analyst at PA Consulting. "The technology is there to bill for it already and people do subscribe to text services for things like football scores. Eventually we will see the stuff that people were dreaming about in the late 1990s come true."
But an established payment model is only half the story, say analysts. Stansell says mobile operators also score a crucial advantage with WAP services because they tend to operate a "walled garden", restricting access to the wider internet.
"One of the reasons for the wider proliferation of content on mobile phones is that mobile operators are not marketing wider internet access," he says. "The mobile environment is a walled garden and the fixed-line internet is not. There is effectively unlimited access on the internet. This makes it hard to charge for content on the fixed internet side."
The one hope for the fixed-line internet is the gradual introduction of superior broadband technology, enabling ever faster download speeds. In the UK, BT Group is already offering a 1 megabit download speed on its broadband service. But the ultimate aim is VDSL, which will enable superior video services.
As the technology improves and broadband connection prices fall, the fixed-line telecoms operators hope to turn broadband into more of a "lean back" technology by moving it from the study or hall and into the living room. Combined with technologies such as Bluetooth, the short-range wireless solution which connects different devices together, broadband could eventually be used to transmit content directly on to the TV, giving users a high-quality interactive audio-visual experience.
MTV already runs a live TV channel exclusively for the web, broadcasting live band performances. It is also busily negotiating deals with broadband providers that will see the channel distributed as part of much larger content packages.
Simon Guild of MTV concedes revenues from broadband are still small compared with mobile, not least because mobile enables the broadcaster to generate significant revenues from ancillary services. But MTV is more optimistic than Endemol that broadband offers significant potential as penetration increases and the technology continues to improve.
Technological developments will only increase the appeal of broadband to a range of content providers, but this is unlikely to be much at the expense of mobile phone content. Mobile phone penetration is still growing and, more importantly, users continue to upgrade to the latest phones with colour screens.
On the back of these trends, data services on mobile phones can only continue to grow. The mobile phone may have the disadvantages of slower download speeds and smaller screens, but it has the crucial advantages of being a trusted and highly personal device with a proven payment model. In the short-term, entertainment groups looking to sell their content will find this hard to beat.
