September 13, 2006 1:45 PM PDT
News Corp.: Entertainment going mobile
Peter Chernin, who on Wednesday delivered the opening keynote speech for day two of the CTIA Wireless IT & Entertainment 2006, said the economic upside to even incremental growth in data sales on mobile platforms is huge--and it should provide enough incentive to get all parties working together.
Chernin said that today only 4 percent of the 219 million mobile subscribers in the United States watch mobile TV on their handsets. But if that figure increased to 20 percent and each viewer spent just $10 per month on mobile video, mobile TV would generate nearly $5 billion in revenue.
Getting every teenager in America to spend $5 per month on mobile entertainment could generate another $5 billion for the industry, Chernin said. And simply increasing the number of people buying ring tones by just 5 percent could generate $1 billion revenue per year, he said.
But in order to realize this revenue growth, he said, handset makers, mobile operators, marketers and content creators will have to work together.
"If you look at the history of entertainment, partnerships with our distributors have been key to our success as an industry," he said. "That's what we need to do with wireless. And we need to do it now. It's too big of an opportunity to waste time."
Chernin outlined several steps for making this happen. First, he said, content owners need to create engaging content for users that is appropriate for the audience they're trying to serve.
"I'm in a business where I produce a product that is completely unnecessary," he said. "No one needs our content, but we've made them desperately want it."
He noted that a one-size-fits-all approach won't work on mobile devices. Chernin also believes the experience on a mobile device needs to be interactive, and that original mobile content is essential.
"Mobile entertainment needs to be its own medium," he said. "Some people look at mobile as another sales channel for repurposed content, but that's not enough."
He also touched on the need for operators and handset makers to make sure that content can be found more easily. He emphasized the need for developing easy-to-use search methods and also simpler business models, so that consumers know how to buy mobile content.
He also said standards need to be adopted to ensure that the quality of the experience is good for consumers. And he said that operators need to embrace advertising to create even more revenue-generating potential.
Chernin said that News Corp. is practicing what it's preaching with its $188 million deal to buy a majority stake in Jamba. The company is already developing new content from its popular TV-series "The Simpsons" that is specifically designed for mobile devices. The Jamba platform, which creates and sells ring tones, wallpapers and other mobile content, will be leveraged to distribute this new content, Chernin said.
"We want to be your partner," he said. "And with Jamba, we are in a position to help drive and define the future of mobile entertainment."
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