Matthew Feldman of Versaly recently worked with Universal Studios on a mobile initiative based on Meet the Fockers that focused on marketing, driving sales and providing content to fans. Photo credit: Alan Berner/The Seattle Times.

Exclusivity, Pricing and Revenue-Sharing
While exclusive licensing deals are common in most content and product categories, that is not the case in the mobile market. At this early stage in the technology’s lifecycle, exclusives — with rare exceptions — don’t benefit any of the parties. Content publishers work exclusively with brand owners (usually on a property-by-property basis), but exclusives rarely occur between carriers and content providers.

In cases where carriers do want an exclusive, they have to make it worthwhile for the publisher and brand owner. “The carriers have to commit to marketing and put money up to get an exclusive,” Feldman explains. “They have to provide value, since you’re losing a lot of exposure by being exclusive.”

The loss of exposure can be significant. Sorrent, for example, can reach up to 800 million subscribers through 90 carriers worldwide with a non-exclusive deal. Even the largest carriers have just a fraction of that reach.

On the other hand, an exclusive can lead to positive benefits for content providers, namely a featured position in the product offering, such as appearing in Cingular’s “What’s Hot” area. “The key real estate in this business is the carrier deck,” says David.

Meanwhile, carriers don’t see much benefit from exclusives either. Most don’t market individual branded data or content programs heavily in mainstream channels, focusing instead on basic competitive values such as handsets, services and pricing. “The killer app is still making a phone call,” says Burris. “It’s hard to take advantage of the exclusive.”

Publishers set consumer prices, in conjunction with carriers. CellToons costs $4.95 per month on Sprint, while Cingular offers Disney and Pixar content at download prices ranging from $1.99 for ringtones to $5.99 for games. Each carrier takes a different — but significant — percentage of the subscription or download fee, with amounts varying depending on the category of content and other factors. Feldman reports that a publisher’s compensation could range from 10 cents per download to 50% or 60% of the retail price (or about $1.20 or so per download). Publishers then remit a percentage of their proceeds from a given brand to the content provider/brand owner.

Most animation studios see mobile marketing and distribution as here to stay, and are hoping to learn about the market through initiatives like those described here and position themselves for success as the wireless universe grows. As Rothwell says, “It’s clearly one of the most exciting emergent technologies out there, and it’s rapidly developing.”

Karen Raugust is a Minneapolis-based freelance business writer specializing in animation, publishing, licensing and art. She is the author of The Licensing Business Handbook (EPM Communications).