Hollywood Goes Wireless
By Joachim Bamrud, Fri May 30 00:00:00 GMT 2003

Campaigns for the new Star Wars and Spider-Man movies are the latest examples of the growing ties between Hollywood and the mobile sector. Up next: 3G movies and trailers.

Children, teenagers and adults all over the world are now lining up to watch the latest Star Wars movie, "Episode II - Attack of the Clones." But apart from the latest plot turn and exhibit of George Lucas' impressive special effects, the movie also marks the latest chapter in the growing relationship between Hollywood and the mobile phone industry.

It's a relationship that is evolving quickly - from mobile producers placing their phone in a hot Hollywood movie to Hollywood studios distributing movies, trailers and movie-related content on mobile phones.

While a lot of the focus right now is on ringtones and logos, both the movie industry and the mobile phone industry are most excited about the ability to download trailers and even actual movies on mobile devices, an option made possible by 3G technology, which can provide data transfer speeds up to 2MB per second.

"We're really excited about 3G phones," says Alex Kanakaris, CEO and founder of Kanakaris Wireless, a California-based company that has been offering full-length movies through the Internet since 1995 and through Pocket PC's the past year.

In Japan, the country's two top carriers - NTT DoCoMo and KDDI - are both offering 15-second movie trailers in their 3G wireless Internet services. FOMA, the 3G service from DoCoMo, also features 15-second surf movies and videos. And earlier this year - from February 18 to March 9 - DoCoMo tested out broadcasts of video and advertising to PDA's in conjunction with California-based ActiveSky and Japanese ad agency Dentsu.

Some 210 test users were able to see free movies through Sharp's Zaurus PDA after first seeing a 15-second advertisement. "Streaming video is … still in the early adopter phase, but it's far more developed in Japan than anywhere else in the world," says Gerhard Fasol of Eurotechnology, a Tokyo-based consultancy.

A Myriad of

U.S. operators are paying close attention to Japan and will likely follow suit soon. "I can see us offering our customers the opportunity to view movie clips and trailers in the near future," says Greg Roberts, director of national promotions and segmentation for Cingular Wireless, the second-largest mobile operator in the United States and a leading user of current data technology tied in with the new Spider-Man movie.

However, several key industry players view the concept of movies on mobile phones as far-fetched and unlikely to appeal to many consumers. Instead, they believe the mobile space will create a new medium that can complement movie theatres rather than provide a full-fledged alternative. Perhaps we will see made-for-phone content that may be based on Hollywood movies without actually being a phone-formatted version, as Andy Nulman, president of Airborne Entertainment, suggests. Airborne is a Canadian company that produces PocketBoxOffice.

Or perhaps the mobile medium will become like DVD's these days, offering additional scenes and alternative endings, as James Robinson, the movie director ("Still Breathing") and president of Cinema Electric, suggests. Cinema Electric is a Hollywood-based company behind a service called PocketCinema that delivers EMS and MMS clips of short films on adventure sports (Le Mans race), the F16 fighter pilot and even pinup girls

"You don't want to see Star Wars on a small screen, but a big screen," says Nulman. Adds Robinson: "The Hollywood conventional wisdom is that when my phone looks like a TV, then it will be like TV. We reject that thinking."

A key question, of course, is what the price would be for movies and trailers. Even if they were to be offered for free thanks to advertisement, the user would still have to pay data transfer fees. And they could be quite significant, Robinson says. To watch a one-minute streaming video costs between $1 and $2, whereas short movies of the type Cinema Electric has produced can cost as little as 12 cents on SK Telecom, the Korean operator that is one of its clients.

The other key question is whether a consumer wants to spend 90 minutes watching a movie on a phone. Dann Wilkens, a spokesman for PacketVideo, a California technology company that works with such studios as Warner and Vivendi Universal, believes trailers rather than movies will appeal to consumers. “We’re not going to substitute for a movie theater, but get you to that movie theater," he says. Kanakaris disagrees. "Trailers are great [but] one of the mistakes studios make is to think that people only want to watch trailers," he says.

Spotlight on Wireless

Today, all major Hollywood studios have either created separate mobile divisions or boosted the mobile focus of marketing divisions. Part of the reason for the growing attention is the emergence of color-screen phones. "There's the perfect target device for movies," says Anthony Stonefield, chief strategy officer of Moviso, a mobile media content company owned by Vivendi Universal Net USA.

But the new focus is also the result of two other factors: 1) the huge revenue potential presented by the mobile medium and 2) the fact that ignorance isn't necessarily bliss. Having no policy may lead to another Napster-like scenario.

One major challenge for the studios is the potential for piracy. Many handsets don't come with Digital Rights Management (DRM). "It's pretty bad. In excess of a third of new showcase handsets forgot DRM," says Stonefield. Ilkka Raiskinen, vice president of mobile applications and services at Nokia Mobile Phones says DRM is "extremely important" for agreements with content providers like Hollywood studios.

Kanakaris believes the main value of DRM is to provide a way for Hollywood studios to feel more comfortable about digital distribution rather than providing actual technical restrictions on copyright violations. On the other hand, mobile networks offer more accountability and less anonymity than the fixed Internet, while also being considerably more expensive, Stonefield points out.

The relationship between the Hollywood studios and the telecom sector is quickly becoming big business. Knox Bricken, a senior analyst at the Yankee Group, estimates that U.S. operators alone will generate $1.1 billion by 2005 from movies, movie trailers, ringtones, graphics and games. That compares with $214 million today.

Borderless Co-branding

There appears to be no specific geographical differences in how producers and Hollywood studios co-brand. "Branding does not change regionally - the scope of co-operation may vary," says Raiskinen at Nokia.

While Hollywood studios generally see deals with phone producers as key in such markets as Europe and Asia, they view operators as the key for the U.S. market, according to Stonefield. "In Europe it's a media or handset play, whereas in North America it's an operator play," he says.

Ironically, a leading player in the movie-wireless segment, Riot Entertainment (Riot-E), filed for bankruptcy in March, just as the movie-mobile industry was picking up. The company, partly owned by Nokia Ventures, had SMS, WAP and 3G licenses for Lord of the Rings, X-Men and Bridget Jones Diary and boasted such clients as T-Motion and Eircell Vodafone. It is unclear what impact the bankruptcy will have. But the closing of the Finnish company will likely benefit other key players in the content area.

Meanwhile, movie fanatics everywhere can take advantage of current movie tie-ins through the mobile space. Club Nokia members, for example, are now able to download Star Wars-related graphics, ring tones, MMS services and games developed in cooperation with LucasArts, a subsidiary of Star Wars producer Lucasfilm. At the same time, Nokia is offering Star Wars-themed phone covers for the Nokia 3410, 3510 and 3300 series. Club Nokia has no plans yet to include actual movie downloads, according to Raiskinen.

The Star Wars-Nokia campaign coincides with another major movie-phone tie-in. Sony Pictures’ Spider-Man, which is competing with Star Wars in terms of popularity at the box office, includes a product placement by Nokia and a tie-in with Cingular Wireless. An aggressive U.S. media campaign promotes the movie as well as Cingular's services in what the carrier itself claims is the most ambitious movie tie-in ever by a U.S. wireless operator. In addition to ringtones and graphics, the campaign also introduced three faceplates that fit the new Ericsson T60 and T61z wireless phones.

Some analysts believe the campaign may help attract a significant number of new users to the wireless web in the United States. "We have been inundated with positive feedback," says Roberts. "Consumers of all ages liked how we used Spider-Man to deliver our promotional message."

SonyEricsson’s recent movie ties aren’t limited to Spider-Man. In March, the company unveiled the Z700, a Java-enabled handset with games from the Sony movies Men in Black and Charlie's Angels. But it appears that Nokia is by far the most aggressive in terms of movie tie-ins.

In February, Club Nokia announced an agreement with Universal Studios covering more than 100 of Universal's top film and television titles and franchises, including The Mummy, The Jurassic Park Trilogy and Back to the Future. Nokia also had a similar tie-in in August last year with Planet of the Apes after reaching an agreement with 20th Century Fox.

And Cingular is not the only U.S. operator with movie tie-ins. In November, Sprint PCS started offering games related to Disney movies like Monsters and Atlantis, while AT&T Wireless in December started offering graphics and ringtones related to various Disney movies.

The current offers show that there is a significant market already for movie-related content in the mobile space. So, while 3G will undoubtedly add to possibilities, the mobile phone industry and Hollywood can already take advantage of today's technology. As Nulman says: "Right now talking about 3G is equivalent to talking about populating the moon. It will happen one day, but there are a lot of things we have to get through before that time."

Joachim Bamrud is an award-winning journalist with 17 years experience as a writer and editor in the United States, Europe and Latin America. Bamrud has worked for various print, broadcast and online media, including Latin Trade, Reuters and UPI.