REDWOOD CITY, CALIFORNIA – Even as mobile data revenue grows and subscribers enjoy more options for entertainment on the go, a series of barriers are holding back the race toward a mobile multimedia future.
Carriers’ chokehold on services, multiple device platforms, lack of information sharing and tension among partners all are making it harder to deliver new mobile services to consumers, said participants in the Wireless Ventures conference Wednesday in Redwood City, California.
The gathering of startups, major vendors and venture capitalists took place a day after AT&T Inc. reported its mobile data revenue soared 66.8 percent in the first quarter from a year earlier, reaching US$1.5 billion. Though text-messaging and e-mail make up much of the mobile data use in the U.S., carriers and content providers are aggressively rolling out new multimedia services.
Yet it’s hard to for these to proliferate when carriers have tight control over every application except SMS (Short Message Service), said Salil Dalvi, vice president of wireless platforms at NBC Universal.
“That’s the only type of service that virtually anyone can launch without having to talk to a carrier,” Dalvi said.
Meanwhile, carriers aren’t giving content companies the data they need to develop the right programs and prove their value to advertisers, according to both Dalvi and Bill Sanders, vice president of mobile entertainment programming for Sony Pictures
International Television. “We get virtually no data from our distribution partners,” Dalvi said. There needs to be something like the A.C. Nielsen TV ratings for mobile video, preferably coming from an independent third party, they said.
Carriers understandably may be cagey about giving up usage information that might fall into competitors’ hands, Dalvi said, and compiling the data isn’t a priority for them. Sanders said his company had been pushing one carrier partner for viewership information for months. When the partner finally delivered some of the data, it showed that it had collected less than $1,000 in revenue in a month for the content. So far, “this is such pocket change,” Sanders said.
Taking content international presents other challenges, Sanders said. Dubbing a TV show in a foreign language costs many times as much as the license to distribute it, he said. Sanders wants a way to let subscribers choose among subtitles in several languages as is common on DVDs, but that capability doesn’t exist yet, he said.
Carriers, content providers and handset makers clash because they all want consumers to associate the experience with their brand, said Richard Irving, managing partner at Pond Venture Partners Ltd., in San Jose. It may take a decade for those partners to come to terms with this “love-hate relationship,” though they’ll probably start to make money in this area within three years, he said.
The barriers are also daunting for the very startups that are coming up with the next generation of mobile applications, said Paul Hsiao, a principal at New Enterprise Associates, in Menlo Park. Developing versions for multiple handsets, getting certified by phone makers and finally getting on to a mobile operator’s “deck” of offerings are all steep hurdles for new software startups, to the extent that it’s still a big-company game in most cases, Hsiao said.