Matt Kapko

RCR Wireless News
Clear the set. It’s back to business as usual in Hollywood.

Members of the Writers Guild of America last week voted overwhelmingly to end the 100-day-long strike that brought most TV and film production to a screeching halt on Nov. 5.

As if on cue, a heavy fog rolled into the Los Angeles area the morning after the votes were in, hinting at the uncertainty that still hovers over the industry. Writers and studios alike are crunching numbers and counting their losses while the future of many shows they worked on are still unknown.

Later this month, the union’s members will vote to ratify the new three-year contract that calls for annual pay raises of 3% to 3.5% and 2% residuals on new media, which includes programming distributed online or on mobile.

Most have maintained that the momentum of mobile television would not be affected by the strike, however it forced much of the programming lineup into reruns as well.

Good news for mobile

Mobile TV providers are elated that a pledge has been struck to end the strike.

“We are quite pleased to see a resolution to the writers’ strike and welcome the defined economic arrangement for new media. This adds needed clarity to the production and syndication costs of our multi-platform, broadband and mobile content. We also are glad to see the writers get back to work as many of them endured personal hardship during the process,” GoTV Networks Inc. CEO Tom Ellsworth, wrote in a prepared statement.

Most opted not to comment on the specifics of the deal, and instead focused on putting the dispute in the past. However, the deal does not address the numerous legal issues that need to be clarified on the mobile side for programming to flourish across platforms.

“There’s definitely a lot to be worked out on licensing and other issues, especially as we move cross-platform on other delivery opportunities,” a MobiTV Inc. spokesman said.

The networks’ mobile divisions are equally thrilled that a deal is in place.

“I’m glad the parties have reached an agreement. I can’t wait to see new episodes of some of my favorite shows on all the networks,” Salil Dalvi, general manager of wireless platforms at NBC Universal, wrote in response to questions.

The WGA was seeking to increase its residual structure for all content, regardless of the platform, to 2.5% of revenues. As it stands now, content purchased by consumers for short-term use brings the guild 1.2% of revenues while content purchased for long-term use carries a guild fee of .35% of revenues, according to a report from Bear, Stearns and Co. Inc.

The new contract falls short of the 2.5% the writers’ guild was seeking and maintains the 17-to-24-day window that studios have to stream shows for promotional use without paying residuals.

“The strike is over. Our membership has voted, and writers can go back to work,” Patric M. Verrone, president of the Writers Guild of America, West, wrote in a letter to members. “This was not a strike we wanted, but one we had to conduct in order to win jurisdiction and establish appropriate residuals for writing in new media and on the Internet. Those advances now give us a foothold in the digital age. Rather than being shut out of the future of content creation and delivery, writers will lead the way as TV migrates to the Internet and platforms for new media are developed.”

$3B impact on L.A.

The guild told writers to report back to work this week as the Los Angeles economy puts a stop to the estimated $3 billion it has lost since the strike began. More than 10,000 people have been out of work since early November.

“We are profoundly aware of the economic loss these fourteen weeks have created not only for our members but so many other colleagues who work in the television and motion picture industries. Nonetheless, with the establishment of the WGA jurisdiction over new media and residual formulas based on distributor’s gross revenue (among other gains) we are confident that the results are a significant achievement not only for ourselves but the entire creative community, now and in the future,” wrote Verrone and Michael Winship, president of the WGA, East.

“The success of this strike is a significant achievement not only for ourselves but the entire creative community, now and in the future,” Winship added. “The commitment and solidarity of our members made it happen and have been an inspiration not only to us but the entire organized labor movement. We will build on that energy and unity to make our two unions stronger than ever.”

RCR Wireless News
Application: SlingPlayer Mobile

Running on: Nokia N95 and Samsung Blackjack II — both running on AT&T Mobility

Yay: I have seen the light; or rather thousands of teeny, tiny lights on a small screen. SlingPlayer Mobile is what I’ve always imagined mobile TV could be — an extension of the programming I already pay way too much for at home. And that’s exactly the point. Why pay for the same entertainment twice?

Nay: The picture quality really shined on my Wi-Fi network at home, but watching video over AT&T Mobility’s 3G network left quite a lot to be desired. It’s obvious that 3G networks have failed to deliver on their promise of a broadband-like experience. Maybe revision 20-something will bring things up to snuff, but time is a terrible thing to waste and I don’t feel like waiting anymore.

We say: SlingPlayer Mobile is the most compelling option currently available in the mobile TV space. Its broadcast- and network-reliant brethren have carved out some room to enter the fray, yet I don’t think any of the current providers have enough gravitas to reign supreme.

After hooking up the Slingbox Solo to my cable set-top box and Wi-Fi router, setup and installation was a breeze. I downloaded the software for my laptop and downloaded the SlingPlayer Mobile software on a Nokia N95. I knew what was coming, but I was still stunned to see my at-home TV setup crammed into a small screen. After playing with the menu a bit, I was able to change channels, pull up recorded shows on my DVR and check out some on-demand offerings. Changing channels takes some time and the device-to-device response wasn’t as quick as I would like it to be.

Video quality on the N95 is phenomenal at 30 frames per second. The picture quality and menu response was at its best when connected to a good Wi-Fi signal. On the 3G network it was off and on. For example, the damn network failed me when tailgating at an Oakland Raiders game last December underneath an overpass in Oakland, Calif. But it worked solidly in the waiting area at Long Beach Airport in Long Beach, Calif. There’s just no rhyme or reason as to why the 3G network is so inconsistent. Signal strength (at least that displayed on the device) was full both times.

Watching TV on the Blackjack II wasn’t as impressive. It appeared to suffer from a lower frame rate, but the device’s lack of Wi-Fi connectivity didn’t provide for an equal playing field. The N95’s performance pins it as the clear winner, however it too suffered some quality issues when operating on the cellular network.

I’ve used the SlingPlayer Mobile quite a bit over the past couple months. Recently, I caught some live election results while away from home and even watched my beloved San Francisco 49ers sink further into a pit of despair one week. I like the depth of possibilities that the mobile application and Slingbox offer, but dealing with a multi-layered menu system designed for a TV isn’t really ideal for mobile. It would be nice to have a simpler structure, but this is where collaboration comes into play. Someone needs to bring together all of the most compelling features available from each mobile TV provider. Each has something to offer. I’ve tapped into MediaFLO USA Inc., GoTV Networks Inc. and MobiTV Inc. for almost a year now. And while I always come away wanting something more, their menu structures play much better in the mobile environment. Menus aren’t Sling Media’s game and it shouldn’t be. It’s handsomely earning its keep by providing the entire at-home TV experience at no additional monthly fee.

SlingPlayer Mobile brings mobile television to another level. It’s amazing to see all the shows you love (and record) right there for your viewing pleasure on a mobile phone. Better yet is the fact it doesn’t cost a penny more, except for the Slingbox purchase and one-time fee for the mobile application. And it’s not just about the money. If I could get a mix of the consistent quality that MediaFLO’s broadcast network delivers with the full arsenal of programming I get at home, I would be among those first in line to pay a reasonable monthly fee for that service. But remember, it’s not me who needs the convincing. It’s the hundreds of millions of wireless subscribers in America who still only want their cellphone to make calls and send text messages.

RCR Wireless News
LAS VEGAS — It is no doubt a tumultuous time for the television industry — writers’ strike not withstanding — and NBC Universal President and CEO Jeff Zucker didn’t mince words during his keynote address at the NATPE++ Mobile event when he described the struggle his company is facing as it watches traditional lines of thinking fall by the wayside.

“The tumult is likely to continue,” he said. “It has been a great run, but today we need a different message.”

Zucker acknowledged that a significant portion of the industry is under pressure and that the status quo ultimately will lead to failure. Change often requires a catalyst, he said, and in November Hollywood got one in the form of the writers’ strike, which has brought much of the industry to a grinding halt.

“It would have been a lot better if we didn’t have a writers’ strike,” but it could leave fertile ground behind in its wake, he said. “The current work stoppage has allowed us to stop and think about the business.”

Zucker admits he doesn’t have all the answers, yet says he’s committed to experimenting with new approaches to long-standing norms in the industry.

Change in the air

He hinted at major changes to come at this year’s upfronts in May, where the TV industry aims to sell upwards of $65 billion in advertising. Additionally, he said NBC Universal will be greenlighting fewer pilots as it looks to cut costs that never return on their hefty investment. Pilots, of which there were 80 for NBC last year (only eight became full seasons), have become standalone mini movies that cost tens of millions of dollars to make, he said.

“This is not about making less programs, it’s about making less waste,” he said.

Zucker also talked about continuing to embrace new distribution platforms in mobile and online. “We have to be everywhere,” he said, but didn’t elaborate on future plans.

“We’re starting to see mobile devices live up to their promise” of un-tethering consumers’ TV viewing experience from the home, he said.

“No matter what happens in technology people are still going to love great content,” Zucker added. “Quality content is still where it all begins.”

Mixed message?

However, earlier in the week Zucker sounded a down note on the mobile industry.

“It’s actually not that important,” he said at the World Economic Forum in Davos, Switzerland, according to media reports. “We’re obviously playing in this world, but playing in a small way.”

According to reports, Zucker said the mobile-phone industry needs to cut entertainment companies better deals for providing content to handsets. Entertainment companies like NBC typically only get a 10% cut of revenue share from the carriers, he said, according to reports.

“No one is really pleased with the economics,” Salil Dalvi, general manager of wireless platforms at NBC Universal, said in an interview with RCR Wireless News.

“We have to see these distribution platforms scale,” he said, declining to elaborate on the specific financial agreements with carriers.

Mobile video and television has been a learning process for all parties in this industry, Dalvi said. While NBC and its competitors want to learn more about what kind of entertainment consumers want from their mobile device, usage has to increase dramatically in scope.

“You have to get 20 million people to make any conclusions,” he said. “It’s clearly not the mass scale of product that Web video is at the moment.”

NBC wants to make the business worthwhile for the carriers too, he added. “What we’re trying to do is take new ownership.”

News has consistently been NBC’s top performing category in mobile, with entertainment and comedy generating interest as well. Drama and reality shows haven’t done as well on mobile, Dalvi said.

Regardless, the market still has some time to grow before it reaches any successful scale. Dalvi said it’s good to keep in mind that a good quality experience has only been available for about a year, while many new features and improvements are yet to come.

RCR Wireless News
Mobile television is all over the place, yet going nowhere fast all at the same time. Consumer choice for TV and video on cellphones is pretty robust, but that’s only if users know it exists.

Sure, mobile TV and video usage is growing month over month, but none of the executives at the top service providers would say mobile TV has truly hit its stride. The numbers just aren’t there yet, but momentum is in their corner, they say, and the foundation for new revenue streams is on the horizon.

The fact is most players in the space are experimenting — hoping to pique consumers’ interest in moving images on relatively small screens. The challenge is not for the weak of heart.

“Over the past year for us I would say it’s been moderate momentum,” GoTV Networks Inc. CEO Tom Ellsworth said. “It’s a year of preparation as we look for a year of momentum in the market.” True momentum for GoTV comes when all carriers are on board and at least half of all handsets in use are 3G-equipped, he said.

“As an industry we’ve created a whole lot of buzz over a year, but all of the consumers aren’t equipped. And that’s the way it goes,” Ellsworth said.

“This is like the Olympics,” he added. “I kind of think of us three years ago as a 16-year-old athlete with a vision and a passion, but it’s going to take four years to get to the next Olympics.”

Different models

Cutthroat competition hasn’t reared its head. Instead, mobile TV and video players are focused on building consumer awareness and appetite for the services.

Ellsworth insists that his partnerships will rule the day in this space. GoTV Networks can most closely be compared to MobiTV Inc. In addition to offering brandname content from traditional networks and studios, both companies create their own content in-house.

Each company distributes content directly through carriers’ 3G networks while broadcast services like Qualcomm Inc.’s MediaFLO USA Inc. offer a standalone network dedicated exclusively to video and other media.

Comparing subscriber numbers is a tricky business for these companies because GoTV builds mobile TV products that require a monthly subscription fee for premium channels while MobiTV manages and equips a branded platform for carriers. GoTV counts less than half a million subscribers and MobiTV surpassed 3 million managed subscribers a few months ago.

“People think we’re competitors but we’re really not,” Ellsworth said. “We are very symbiotic.”

Demand building

Like Ellsworth, MobiTV’s CTO Kay Johansson expects a sizeable shift in mobile TV interest through 2008.

“A big part of this is not going to be about the networks, I think it’s going to be about the user experience on the devices,” he said. “As long as it’s an IP network, I don’t think it matters.”

Johansson said MobiTV is still experiencing the highest overall usage in the market and that it continues to add customers at a faster clip than MediaFLO. Some sources say MediaFLO has surpassed 50,000 users, but the company has yet to disclose any subscriber counts or usage statistics related to the 10-month old service.

When it comes to broadcast, Johansson isn’t yet convinced. “If you look at usage patterns it doesn’t make sense to use broadcast,” he said. “We are prepared for, hopefully, that so much usage occurs that broadcast really makes sense.”

Still, GoTV’s Ellsworth is a big fan of MediaFLO. “We think that MediaFLO is a really phenomenal demonstration of what’s possible in wireless,” he said. “We build content and we want to partner with people like MediaFLO.”

Regardless of the business model at play, most agree that MediaFLO’s service is remarkable and can only drive further interest in the entire market. “We have to make our content look great for the very first user,” Ellsworth added.

Broadcast gaining followers

While MediaFLO is still the only game in town for broadcast services in the United States, there are plenty of big names following its tracks. Broadcast TV groups formed the Open Mobile Video Coalition last year to develop a mobile variant for digital broadcast TV and the Advanced Television Systems Committee is continuing to vet proposals for a voluntary standard for digital TV programming to be broadcast to mobile devices.

When a standard is adopted (some expect this by early year), broadcasters are planning to use their digital broadcast signals to deliver content directly to mobile devices in all of the local markets they serve.

Johansson called ATSC the “true contender” for broadcast mobile TV service. “That’s where we see a really big movement,” he said. “The bandwidth and the capacity of ATSC is so much larger.”

Since the standard will be built on the existing backbone of the TV industry, ratings and everything else the industry relies on would stay in place, making the evolution to mobile that much closer to reality, Johansson said.

“The step isn’t that far away,” he said. “I’d be extremely surprised if it doesn’t turn out in cellphones.”

Making room for networks

But where do the networks fit in to all of this? After all, they’re the companies responsible for the big shows that keep TV viewers coming back.

The market is flooded with too many formats and too many models, said Greg Clayman, executive VP at MTV Networks Digital Distribution. “It’s still kind of messy, but having said that, we are still seeing growth in video use.”

Again, it’s all about awareness at this point.

“What MediaFLO does … is they make consumers aware, they help make consumers aware that all this stuff exists,” Clayman said.

Salil Dalvi, general manager of wireless platforms at NBC Universal, sees things quite similarly. “Having more competitors in the marketplace is always going to be good,” he said.

All of the major networks are spending big money on mobile. “I think the challenge at this point is that we’ve done that before consumers have shown that they’re interested in using the platform at this point,” Dalvi added.

“What we believe is that there is a market for content and entertainment on a cellphone,” he said. “There is very much a gray area about what the business is going to look like.”

Yet, NBC’s strategy is clear, he says. “Let’s make our content available in as many places as we can,” he said. “What we’re focusing on a lot is creating experiences that are tied to our brands. Consumers are familiar with the brands that we have to offer.”

If 2007 was about building the platforms, getting the platforms up and running and making sure that NBC has a foothold in the marketplace, 2008 is going to be more about leveraging its strengths and capitalizing on that foothold going forward, Dalvi concluded.