Media Companies Take Wireless Route to Consumers
Time Warner Inc. and Walt Disney Co. already ply their wares in cinemas, on television and over the Internet. Now they’re reaching into the mobile phone in your pocket. Some phones can already display pictures and replay video clips, but as networks get faster, it will be possible to watch live newscasts or even a whole movie on wireless gadgets. “The opportunity would be based on an ability to provide a very targeted service to a very targeted customer base,” said Steve Wadsworth, president of Disney’s Internet Group. Disney’s Wadsworth said its wireless business is already profitable in markets where it is well established. Disney first started selling mobile content in 2000 via a partnership with Japan’s NTT DoCoMo Inc.
With such advancements, at least half a dozen media companies are looking at new ways they can use wireless to boost their profits and extend the reach of their brands, according to technology consultants from Accenture.
As well as sending media content to wireless phones, companies such as Disney and Time Warner are considering if they should provide full mobile phone services with help from existing network operators.
“The next hurdle will be the imagination of the content providers,” Accenture partner Steven Lamont said, adding that media companies would need to be creative to convince consumers to use their content on phones. He declined to reveal details about clients working on wireless strategies.
While it may be some time before customers start clamoring for mobile entertainment, wireless could also emerge as a potential battleground between cable and phone companies.
Time Warner and cable rival Cox Communications Inc. say they are looking at wireless services as a potential addition to their TV, wired telephone and high-speed Internet offerings in an effort to compete with bundled packages offered by phone companies.
“We think that wireless is another element of the bundle that we need to incorporate,” said Don Logan, chairman of Time Warner Inc.’s media and communications group, which oversees Time Warner Cable. “I expect that over the … course of this year, that we are going to be looking hard at that.”
“Our customers haven’t been asking us for it,” said Mimi Thigpen, Cox’s vice president of strategy, but she noted her company wants to be prepared, if customers begin to demand wireless services.
MOBILE MICKEY MOUSE
Media companies such as Walt Disney and News Corp.’s Fox Entertainment Group Inc. already push entertainment and news to phones through pacts with mobile companies.
But the creator of Mickey Mouse might go a step further and sell its own branded wireless phone service in the United States, using an existing operator’s network.
For example, a branded Disney or ESPN sports service could work, he said. Focusing on specific consumers such as sports fans could help increase customer loyalty and make marketing and customer service more efficient, Wadsworth said.
Sprint, which already lets others use its mobile network to offer their own services, is one potential partner with whom Disney has talked. Wadsworth cited the success of one Sprint client, Virgin Mobile USA, as an encouraging sign.
Richard Branson’s Virgin Group, which operates everything from airlines to music stores, has quickly gathered a U.S. following by targeting young people with services such as its own music offers and that of Viacom Inc.’s MTV.
Using similar tactics, an ESPN phone service with sports options could also create a loyal following, IDC analyst Scott Ellison said. And parents would likely chose a branded phone with cartoon menus for their children.
“If you saw a Disney phone, you would probably be pretty comfortable giving it to your child,” Ellison added.
Fox, which lets subscribers vote via mobile phones for participants in its “American Idol” talent contest, has plans to provide more features to phones. But spokesman Andrew Butcher said it would not offer a branded mobile service.
But providing a branded phone service in the United States, where six national providers are already scrambling for customers amid slowing growth, is a more complex prospect.
“The question is execution,” Wadsworth said. “A lot of consideration needs to happen before we would make a decision to pursue it,” (Additional reporting by Ben Klayman in Chicago)