Content Prophets: Floating Balloons for Wireless Content

The possibilities of content delivered wirelessly to portable devices have been well promoted on TV commercials and in the press. It’s easy to envision kids watching on-demand movies in the backs of minivans, or grandma smiling from a screen on a mobile phone. But those applications are a long way from reality.

Meanwhile, throughout the world, carriers are busily deploying next-generation wireless networks, promising always-on, high-bandwidth connections to a new breed of two-way communicators, and enabling streaming. Now, the race is on to find the killer app that will convince consumers to run out and buy the new PDAs or multimedia-enabled phones, and subscribe to the new services.

Robert Tercek, president of PacketVideo’s applications and services division, says that telecommunications carriers have already invested over $300 billion in spectrum licenses, and believes it will cost carriers around the world another $100 to $200 billion to get 3G networks up and running.

"[The carriers] are paying interest on that money already. They don’t have any money left over to stock their shelves," says Tercek.

Clearly, the need for a compelling selling point is critical. With a cautious eye, device and service vendors have begun to test what types of content might succeed for delivery to wireless devices. One thing they know for certain: such content must be unique. Beyond that, things are much less clear.

Japan Leads the Way

To get a glimpse of the future, we can look to Japan, which is shaping up as the premiere testing ground for wireless business models and content. In May, Japanese carrier NTT DoCoMo will roll out its FOMA (Freedom of Mobile Multimedia Access) 3G service, which will offer streaming full-motion video, music, and games, as well as data-intensive business applications. DoCoMo is hoping that its customers will transition to the new service and buy new FOMA phones with the same zeal as they adopted the service’s predecessor, i-mode. Since i-mode’s launch in February 1999, more than 20 million customers have subscribed and purchased i-mode-enabled phones.

Shun Mishima, vice president of business development for NTT DoCoMo USA, highlights the combination of functionality (such as the ability to check bank accounts) and a large entertainment offering as one of the drivers of i-mode’s success. DoCoMo states that entertainment and games account for about 60 percent of the content offered on the service.

Mishima also cites the low price point of each individual piece of content as a key to i-mode’s success. "Three dollars is like justifying a weekly magazine," he says. DoCoMo earns significant revenue by facilitating payments for third-party content through its own system, for a percentage of the fee. In all likelihood, other carriers will carefully watch the business model chosen by the AT&T Wireless/DoCoMo partnership announced last year to bring i-mode to the United States. But while the business model of charging per transferred bit has proven successful in Japan, U.S. carriers seem loath to veer from the flat-rate model.

Another area of growth is in user-generated content, and Japan — where cellular phones with color screens are widespread — is leading the charge in this area, too. According to Tercek, J-Phone made a big mark in the Japanese market when it released a cell phone equipped with a digital still camera that could send images to other users. Sasson Darwish, president of Emblaze Systems, is optimistic about video. He says that there will be full-motion video-messaging cell phones on the world market by the end of the year, using Emblaze’s streaming technology.