An increasing number of animation, comicbook and interactive game licensors are exploring the possibilities within the wireless data market, both as a means of marketing their properties and as a new distribution channel for content. Meanwhile, animated applications motion-based screensavers, ringtones, games and clips are a growing component of mobile content for all types of brands.
While games and ringtones are two of the most popular mobile content categories overall, there are a wide range of possible applications, including wallpapers, screensavers, ringbacks, text and multimedia messaging, lifestyle content, etc. We try to create as wide a variety of content as possible, says Matthew Feldman, president/ceo of Versaly, which develops programs for SquirrelWorks Coz/Effect and Fairview High Web comics (represented by JINdesign), newspaper comic strips such as Garfield, Ziggy and Cathy (through Go Comics), and other brands. We take a narrow approach to content acquisition, but a diverse approach to mobile content.
Creating a Destination
One of the broadest mobile efforts to date is Marvels just-announced deal with MFORMA to create content based on all of Marvels 5,500 characters (except Punisher, which is under a preexisting deal with another publisher). Mobile games will be a key category; other applications will include mobile comicbooks, greeting cards, graphics, wallpapers, ringtones and voice tones, several types of games, phone functions, virtual character simulations and community and lifestyle applications. MFORMA will gather all this content onto a Marvel mobile channel.
The objective is to create one destination where fans can immerse themselves in anything and everything Marvel, says Tim Rothwell, president of Marvels worldwide consumer media group. Its a saturated, cluttered, competitive marketplace and its difficult to create an awareness level. You have to really knock their socks off. The mobile channel will help make a splash by becoming a one-stop shop for all kinds of Marvel content. We want to bring these comics to life.
Sorrent, which is best known as a mobile gaming company but also provides suites of content around various properties, works with several licensors on programs of varying breadths. With Nickelodeon, it has developed wireless content for the teen/tween EverGirl brand, for which it is doing wallpaper, mono and polyphonic ringtones and a WAP destination site, as well as an interactive game, according to Justin Kubiak, Sorrents product marketing manager. For Ren & Stimpy, on the other hand, it created a game only. Sorrent also is working with ShoPro and Viz on the anime property Inuyasha, for which it has created wallpaper and an interactive game.
As the mobile market becomes established, customers are becoming pickier about what content they will pay for. In the earliest days of mobile data, the novelty of it all convinced consumers to try anything, but now, with more to choose from, they make their decisions based on quality or other values, just as they would with any entertainment vehicle. They still want content, but theyre more discriminating about what they want, Kubiak says. You have to be more creative.
John Burris, director of wireless data services for Sprint, points out that quality is an important characteristic of any content at this early stage. Customers are just trying data for the first time, and they may not come back if they have a bad experience, he explains. He agrees with content publishers that its important to have a fit between content and property; a particular animated film might make a good game, for example, but not a good screensaver or ringtone. We dont want to do it if were forcing it, Burris says.
In many cases, the respective content categories serve different purposes. We find that games allow consumers to immerse themselves in the property, while ringtones and wallpaper are great ways for people to personalize their phone and deepen their affiliation with the property, says Michael Arrieta, svp for Sony Pictures Digital Ent., which has produced such content for Spider-Man. (Sony Digital had rights to create wireless applications for the films, released by its sister studio Columbia Pictures.)
Technology is quickly improving, allowing high-quality graphics at fast speeds. Full multimedia animation clips are possible, at least on some handsets and through certain services. Sprints content offerings can be divided into three levels, depending on the handsets/services for which they are intended, according to Burris. Animation of one to three frames per second runs on mass-market, Java-based phones, which are the most widespread graphics-capable handsets today. Much-improved animation at 10 to 15 frames per second is possible on new, multimedia handsets, of which there is a growing but still limited number. Finally, animation of about 20 to 24 frames per second will run on next-generation handsets, which will start being introduced later this year and will be compatible with the carriers improved, 3G (third-generation) networks.
SprintTV is Sprints high-end multimedia product, which falls into the second category and works on two handsets as of early 2004. SprintTV includes several animation channels, including Cartoon Network, Adult Swim and CellToons, a channel from Thumbworks featuring independent animation. (MobiTV, a service available on all Java handsets, includes some animation as well, although not full multimedia.)
Another recent streaming content deal involving animation is between Stan Lees POW! Entertainment and multimedia content publisher Vidiator Technology. The partners will create wireless, streaming broadband content for carriers worldwide. Like the examples mentioned above, there will be dedicated channels devoted to Stan Lees creations, under the Stan Lees POW! brand, with applications including 3D avatar greetings, messages and announcers. Content will be developed first for The Drifter and The Accuser, followed by Stripperella and other original characters.
Theres lots of cool animation stuff going on, Burris says. Cartoons look very, very good on a handset. Thats not to say CNN or Fox Sports dont look good they do but cartoons look awesome.
Animation is well-suited to a three-minute format, adds Peter Watkins, vp of marketing for Thumbworks. Visually, you can shrink it down and it still looks good.
Meanwhile, technological improvements are occurring daily. In the future, there will be 3D graphics that are more rich and more enjoyable, says Burris, who likens next-generation gameplay to that on a console, albeit on a two-inch screen. Its just a few months away.
It should be noted that while carriers such as Sprint and Verizon offer multimedia and streaming video services that can accommodate high-quality, lengthy animation clips, not all carriers do at this time.
From Brands to Independents
Many mobile content programs are tied to well-known brands, animation-based or otherwise. Its true that certain brands resonate with users, says Kimberly Tassin, MFORMAs director of corporate communications. Thats why we did the deal with Marvel. Theres already so much stickiness to the Marvel brand, and its an evergreen.
Recognized brands give consumers the confidence to try an application, especially when theyre new users or are browsing through the large amount of content available. Branded content sells because people know what theyre getting into, Burris says. Brands that work, he continues, lend themselves to high-quality applications, maintain a high profile among consumers and hit the sweet spot of those who buy this content, that is, teens and young adults.
Conversely, some well-known brands are appealing because they attract customers who may not be using cellphone data now, but might try it if they like the property. Burris mentions a Finding Nemo mobile game, which brought many families and kids to data for the first time, as an example. It doesnt hit the sweet spot of the gamer space, but it gets us into a new customer set.
Were still kind of trying to gain awareness for any kind of content, so the awareness for the brand is pretty important, says Kubiak. But he notes that publishers like Sorrent also like to work with lower-profile brands that have a loyal audience and are willing to work to help develop good content and market it to their core fans. Kubiak says ShoPro and Viz are doing this with Inuyasha. Theyre really working with us to help raise awareness to their own audience, he explains, describing cross-marketing opportunities with manga books, anime DVDs, websites, and licensing and marketing partners. Marketing directly to that audience has been invaluable.
Similarly, MFORMAs Marvel deal allows the company to ride the coattails of Marvels many entertainment releases. MFORMA will launch content based on various Marvel films, and will cross-promote with those releases, according to Tassin. For example, a movie poster might include a short code a number customers can call to receive special wireless content to engage mobile users and get them to do something on their mobile phone.
While both entertainment-tied and lesser-known properties will be featured in Marvels mobile initiative, you have to draft off the massive amount of marketing dollars behind a film, Rothwell says. If you have Fantastic Four coming out on July 4, youre not going to say, `Lets hold off on Fantastic Four and do Antman.
Despite the increasing importance of branding, opportunities exist for independent animators as well. If you have really great content, you dont have to have a great brand to make hay in this space, Burris says. Were all about the funky.
CellToons, currently available only on Sprints 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 wouldnt 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, wont 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.
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 doesnt, so that theyll 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 its really about marketing and driving sales and providing content to fans.
Some mobile programs can generate significant revenues, however. On the various initiatives weve done so far, weve made very good money, says Rothwell.
For independent animators, revenues may be the Holy Grail, but the exposure has value. Very often theres not a market for [indie animation], Watkins points out. I dont think any of us are going to get rich right out the door. Were 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.
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 carriers 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 couldnt 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 cant 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 theres no one standard business model anywhere, says Feldman.
Watkins agrees. The carriers are all over the map.
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 technologys lifecycle, exclusives with rare exceptions dont 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 youre 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 Cingulars Whats Hot area. The key real estate in this business is the carrier deck, says David.
Meanwhile, carriers dont see much benefit from exclusives either. Most dont 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. Its 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 publishers 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, Its clearly one of the most exciting emergent technologies out there, and its 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).