Mobile Content and the Future of Film

The Future of Film Summit in Santa Monica considered mobile content in a panel “Dialing up the Fourth Screen–Next Wave of Mobile Film and Video Entertainment.” Moderated by Digital Media Wire CEO/publisher Ned Sherman, panelists were Jonathan Barzilay, svp of programming and

FLO TV personal TV

advertising at FLO TV; Frank Chindamo, president/chief creative officer at Fun Little Movies; Shashi Fernando, CEO of Saffron Digital; and Daniel Tibbets, EVP/studio chief of GoTV Networks (who was named Mobile Ambassador at the Mobile Excellence Awards).

Each panelist introduced his company: Saffron Digital, based in the U.K., Rome and now L.A., has been running mobile solutions for six years, ranging from VOD to pre-loaded movies for cell phone manufacturers. The aim is the multi-domain space, said Fernando, so that the user can watch content on many different platforms.

Fun Little Movies is a small independent company that licenses short comedic funlittlemovies content to Sprint and also has an iPhone app and an app in the Blackberry store. Chindamo reported that the company will be launching content in other countries, and showed Bewildered, an animated comedic short from Planet Green, as well as an episode of the Mr. Wrong series.

Tibbets at GoTV ran a short video describing how his company creates original content and distributes it across all mobile devices, broadband and TV. The company has also built a channel for Sprint Exclusive Entertainment and broadcasts live events. Barzilay noted that FLO TV is a wholly owned subsidiary of Qualcomm, and explained that it provides live TV to mobile devices. “Not just mobile phones but also our personal TV device and does so over broadcast spectrums,” he said. “We have a little original content but we focus on big brands.” FLO TV’s personal TV has been on the market for only three weeks, although the FLO TV service has been in operation since 2007.

The moderator, Sherman, asked panelists what mobile distribution channel earns them the biggest audiences. For Fun Little Movies, it’s Sprint, gotvnetworks where they launched as a top deck channel in 2004. “As was said at the Mobile Excellence Awards, mobile content creators need to go foreign,” said Chindamo, who just came back from a global trip talking to carriers.

There are 4 billion handsets in the world. According to Fernando, about 40 to 45 percent of those handsets are video-capable. “But very few can do premium video because they’re not DRM-capable,” he noted. [DRM is digital rights management.] He also reported that about 15 percent of these phones can handle pay video. In the U.S., the statistics are even more sobering. “This has been the slowest market,” said Fernando. “It’s less than 5 percent but it’s growing faster.” Next year, said Fernando, all handsets in the U.S. will be DRM-enabled, which could change the outlook considerably.

saffrondigital Discoverability is another issue. Fernando noted that a company like Nokia will do a free music giveaway to get consumers. “That will be to bring them online where they might download a movie,” he said. Tibbets noted that “every carrier and platform has a different way to get content. “Being on-deck is important to gaining consumers and also for marketing,” he said. “You need marketing, promotion and brand partnering.” Tibbets said GoTV has a team that focuses on the consumer experience, like a network creating a line-up. “Favorites, recommendations: we have everything to enable consumers to seek content.” For Barzilay, it all depends on metrics and reliable measurement. “We throw a lot of things out there,” he said. “We have a deal with Rentrak [for metrics], and the learning from that is tremendous . As metrics get more reliable there will be more and more ability to program opportunistically.”

Generating enough content is another issue. Both GoTV and Fun Little Movies have their own studios, to create original content. Chindamo noted that he also licenses third party content, for a 50 percent revenue share.

Barzilay said that FLO TV is a platform rather than a studio. “We provide 24/7 linear TV coverage,” he said. “Long form is a part of what we do, as well as short form. CBS Mobile gives us a fair number of long-form simulcast hours. The Young & the Restless, which airs at the same time as on TV, does exceptionally well. We’re still trying to figure out who likes what and when.” Barzilay noted that FLO TV sees a “tremendous sweet spot” around children’s programming and also live-sports, as well as news events. “We mostly offer long form, but there’s proof short form does well,” he said.

The panelists noted the difference between an app and a video service. “People would down an iPhone app and use them for awhile,” said Tibbets. “With video, you have to provide something on a daily or near-daily basis to get people coming back.”

Are people making money in mobile? Absolutely, said Fernando. But he added a caveat. “The industry is in an early stage,” he said. He noted that Saffron Digital focuses on long-form programming. “In Asia and the Middle East where you buy a short-form TV program, it has to work across multiple access points–not just mobile but also the PC,” he said. “A purely mobile conversation is shutting the gate.”

One hindrance to making money is the fact that Apple has set the price point so low. One area that needs improvement to help mobile content take off is the cost of making it. “Apple is happy to take a loss,” said Fernando. “That sets the expectation. With Nokia, we sell Transformers 2 at $17.99 for mobile and PC consumption. With Apple, it’s $9.99 and it’s almost impossible to compete.”

Chindamo said he has high hopes for the Nokia Ovi store. “It’s free content with an up-sell to premium content,” he said. “We’ll show a couple of episodes that links to buying the full series that will cost 99 cents.”

Tibbets doesn’t see a model that makes sense for individual clips or one-off content. “We’ve built channels ,” he said. “And people will pay anywhere from $1.99 to $4.99 for those channels, which are everything from rap to sports. Each channel is 50 to 80 percent margin and that’s phenomenal. From a channel perspective it makes sense: it’s finding the right content, the right channel and the right way to monetize it across the board.”

The conversation turned to whether there is an ad model that works or has good prospects for working. Tibbets noted that “you have to have enough aggregated views to warrant that.” Chindamo noted that Planet Green paid Fun Little Movies upfront. “We’ll work with a brand to convey their message and take a distribution fee on the backend,” he said.

To a question about the impact of the U.S. broadcasters entering the mobile content business, Barzilay said FLO TV “welcomes the ATSC stations in.” “We think they can help drive attention for consumers,” he said. ” It’ll build awareness and condition the audience to the availability of mobile. Having these new voices adding to the chorus can only help.There are all kinds of potential partnerships we can see happening. But because we’ve done it first, we can say that it’s not that easy to go to market and deliver devices. We look forward to working with them in a complementary fashion.”

Marketing mobile content is another conundrum. Whereas Chindamo relies on Saffron Digital and Sprint to market his content, Fernando replies that he relies on his company’s partners to drive the message. “The question of too much content, not enough personalization doesn’t necessarily lead to an open environment,” he said. “We desperately drive our [mobile phone manufacturer] partners to market their content. But they do video to sell devices, not to sell more video.”

Barzilay said they see FLO TV as “a solution to content providers who are losing their core business.” “I come from the TV world and it’s difficult to watch those ratings erode,” he said. “Whether it’s Hulu or a mobile service programmed by ABC or Fox, this is an opportunity to keep people in touch with content they’re emotionally connected to. Our partners are increasingly eager to spread the word and that will only increase. It’s the same content but a different way to touch it.”

Tibbets reminded everyone that the carriers robustly promoted text messaging, but nobody saw the commercials or paid any attention. “It took Ryan Secrest to get people texting,” he said. “We need Ryan Secret, that moment of awareness. It’s the fragmentation of the messages by all the carriers that gets the message lost. You can get video on your Blackberry and most people don’t know that.”