CellToons, currently available only on Sprint’s multimedia service, is focused exclusively on independent animation. Each month, subscribers can access a changing roster of one- to three-minute animation shorts in all styles, from artists and companies such as ADV Films (a distributor of anime), Bruno Bozzetto, students from the Vancouver Film School, Mike Wellins and Blur Studios. “We bill ourselves as `the non-stop mobile animation festival’,” says Watkins.

Watkins encourages animators to send content to Thumbworks. “We wouldn’t close the door on anyone willing to have a conversation,” Watkins says. There are some guidelines; animation distributed in the U.S. has to be PG-rated at the most — even if targeted toward adults — and the content has to work on a 2-inch screen. Anything in which text is an integral part of the joke, or for which the audio is too elaborate, won’t work well. “They do have to keep in mind the medium,” Watkins cautions.

Not all content publishers focus yet on wireless multimedia or streaming animation, due to the small market size (although this is likely to change quickly). “In this business, you have to answer to all handsets,” says Brad David, vp of business development at Dwango Wireless, which works with Rolling Stone and is about to launch a program with Napster.

Brad David of Dwango Wireless feels it’s important for his company to focus on content for all kinds of handsets, not just wireless multimedia.

Marketing Versus Revenue-Generation
Brand owners and independent animators typically have a number of objectives for entering the mobile space. Many are interested in testing the market to see what works and what doesn’t, so that they’ll be well positioned when mobile data becomes a mainstream business in the U.S. (as it already is internationally). Some are interested in the marketing possibilities, while others see it as primarily a current or future revenue-generating initiative.

Versaly recently worked with Universal Studios on a mobile initiative around Meet the Fockers. “It was about driving ticket sales and not about selling wallpapers and ringtones,” Feldman says. One of the elements was a trivia contest in which consumers had to see the movie to participate and win prizes. “[Studios] want to generate revenue from this, but they realize the revenue from mobile is insignificant compared to what they generate from ticket sales,” Feldman explains. For most studios and well-known musicians, he continues, “the incremental revenue is of interest, but it’s really about marketing and driving sales and providing content to fans.”

Some mobile programs can generate significant revenues, however. “On the various initiatives we’ve done so far, we’ve made very good money,” says Rothwell.

For independent animators, revenues may be the Holy Grail, but the exposure has value. “Very often there’s not a market for [indie animation],” Watkins points out. “I don’t think any of us are going to get rich right out the door. We’re all taking a wait-and-see attitude.” He adds, however, that even with the relatively small number of people who have phones that can handle high-quality animation today, animators can still derive some revenue from mobile content distribution.

Exposure and revenue-generation often go hand in hand. “Our primary objective is always to deliver compelling, high-quality entertainment to consumers,” says Arrieta. “The exciting thing about the mobile marketplace is that we can generate revenue by providing original content that extends consumers’ experience of some of their favorite entertainment properties and consistently broaden exposure for the properties worldwide.”

Business Models
The mobile phone market is fragmented. There are more than 300 phone models available worldwide, and each carrier has a top 10 to 15 models with which it works. (As noted, not all of these can handle sophisticated animation or multimedia content.) Therefore, content publishers must tailor content to each carrier that is interested in a given property, depending on the carrier’s technological capabilities, content focus and other criteria. “It takes a lot of management to figure out what content to deliver to each,” Feldman says.

Most content providers/brand owners work with mobile content publishers such as Versaly, Sorrent, Jamdat, THQ, Dwango, MFORMA and others. These companies develop content for the mobile space based on guidelines from the licensor, then sell the content to carriers around the world. Many carriers have preferred suppliers for certain genres of content, although a unique application or strong brand can allow other publishers to break through.

Content publishers have the technical expertise, understand the market, know what the carriers want and how to sell to them, can spread development costs across a large number of programs, and have relationships with carriers around the world. They can reach a large audience that most brand owners couldn’t reach alone. MFORMA, for example, works with more than 100 carriers worldwide.

Sprint works with 22 or 23 content publishers and 10 to 20 aggregators, says Burris. While some large brand owners forge deals directly with a carrier — although they typically contract with a publisher to actually develop the content — most opt to work through a publisher. “The carriers can’t work with 500 partners,” Burris comments.

Each carrier has its own standards in terms of technology, content, compensation, contracts and pricing. “The most difficult thing in this industry is that there’s no one standard business model anywhere,” says Feldman.

Watkins agrees. “The carriers are all over the map.”