When Martin Clayton needs a reminder of America’s growing addiction to mobile devices, he recalls his teenage daughter’s recent $700 cell phone bill. "It almost ruined my vacation," laments Country Music Television’s VP, digital media. In his daughter’s case, the culprit was text messaging. But as the cable industry contemplates new wireless services, extending cable content and control to portable devices will require not only text, but audio and video fare. And much of that content is likely to revolve around music. "There are two types of media that mobile devices were born for: That’s music and news," says David Del Beccaro, president and CEO of Music Choice.

To be sure, some of cable’s biggest music programming brands are moving fast on mobile. CMT has launched about 1,000 mobile "episodes" since July 2005, including full-length music videos, live studio sessions and news segments in partnership with major cellular carriers. "It’s another platform to get our brand out there," Clayton says. "It’s not a channel world anymore; it’s a brand world." CMT has even premiered music videos on its mobile platform before debuting them on the linear cable channel. CMT Mobile also let viewers vote via text message to pick the winner of the Miss Congeniality Award for the first time in Miss America Pageant history when CMT carried the Jan. 29 event. "We want to do more interactive stuff," Clayton says. "More polling, more voting, more convergence with the linear channel."

MTV, which works with mobile content aggregators MobiTV and Amp’d Mobile, is readying an even bolder push into the mobile space. The programmer just struck a deal to stream content on Qualcomm’s new MediaFlo video service for mobile devices, and in December it launched its "Bananas" stand-alone content subscription service that mixes fare from MTV, MTV2 and mtvU. MTV will draw material from hit shows like Laguna Beach and The Real World, as well as offer major-label artist ringtones, sound bites, cast photos, graphics and wallpapers from current programs and past favorites like Beavis & Butt-head. Greg Clayman, SVP of MTV Networks’ Mobile Media Group, says Bananas will allow MTV to go beyond simple partnerships with wireless carriers and services. "It’s direct to consumer — engaging consumers outside of operators," he says. "We hadn’t made much of a push in that [in the past]… but the needle is moving on that one."

The direct-to-consumer idea seems to be catching on — even among niche music networks. In November, Gospel Music Channel launched its "Mworship" mobile service that provides gospel music ringtones and text-based music news alerts to subs who pay $4.99 to $9.99 per month. Mworship doesn’t offer video, but Justin Williams, Gospel’s senior director, Internet and new media, says video could join the mix as more consumers buy multimedia-enabled mobile devices. "There’s a very sharp uptake in 3G-enabled devices," he says.

Bypassing Cable Ops?

Of course, moves by music programmers to create stand-alone mobile services raise a big question for cable operators. Will the big music content brands — emboldened by the massive success of Apple’s iPod (and the potential success of its new iPod/cell phone known as iPhone) — cut cable operators out of the loop when it comes to mobile platforms? MTV, for example, already operates its own broadband service, "Overdrive." Who needs cable for services geared toward mobile devices? Not so fast, says MTV’s Clayman: "It’s not us against them. I think the MSOs are still partners for us." He points out that carriers remain gatekeepers controlling what data is sent and received on their networks. "I can’t get content to your phone without hitting some kind of carrier network," he says.

Indeed, music programmers appear ready to work with cable despite the opportunities to go around them. "We’re respectful of our affiliates," says Jennifer Caserta, EVP and general manager of fuse, whose fuseMobile service is available through MobiTV. "And we would never do anything to put the linear network at risk of losing audience." But she adds that all content providers are trying to figure out the best way to extend their brands to portable devices. "This is a great time for experimentation," she says. "We have to find out what works. Time will tell. In the mobile space, there’s going to be so much happening over the next 12 months."

Miguel Gomez Winebrenner, a senior consultant with Redwood Shores, Calif.-based general strategic consulting company Cheskin, says finding that balance will be a big challenge as cable music content goes mobile. "The music networks might want to break the ball-and-chain of being tied to operators, but they’re going to dance around it very carefully," he says. "They don’t want to ruin their relationships with their affiliates." Says Bill Opet, who leads the broadband and cable practice at management consultancy TMNG Global and works with several MSOs: "[Cable operators] have long-standing relationships with the music programmers. I think they’ll create win-wins." Telcos, meanwhile, lack those historic relationships. "This is where cable has a strategic advantage," he says.

Cable operators are still trying to figure out their mobile strategies, which may include a mix of partnerships with music programmers and stand-alone mobile services. "Our approach would be to explore our options," says Lisa Pickelsimer, Cox’s director of video product development. "Certainly, we would enter conversations with the likes of MTV and others from whom we buy content. But we’re also open to looking at other opportunities."

One booming area is ringtones. IDC predicts that the total volume of ringtone sales in the U.S. will approach the 1 billion mark by 2010, up from about 430 million this year. By then, more than one-third of all U.S. wireless subscribers and customers are expected to purchase at least one ringtone every quarter. At a few bucks a pop, that could translate into significant new revenue for cable operators contemplating the quad play. "There’s much money to be made from this content," says Stefan Moller, head of music services at consultancy LogicaCMG, adding that the challenge for MSOs is knowing "how to leverage it and use it."

Wireless/Broadband Convergence

MSO broadband portals, which have yielded mixed success, could also become more important as cable operators enter the wireless game. "The cable companies need to be able to control the user experience," says Opet. "Cable portals are being developed to really be strategic assets for their wireless users." Indeed, Pickelsimer says Cox is considering making mobile an extension of its broadband business. "We may offer a subscription music service on Cox.net, and you can also access that service on your cell phone," she says.

Cable could also benefit from Apple’s iPhone rollout, which observers expect to finally turn MP3-enabled handsets into a mass-market product. "There are a lot of ways cable could capitalize on the consumer’s excitement over Apple’s entry into wireless," says Opet, noting that Sprint joint-venture partners Comcast, Time Warner Cable, Cox and Advance/Newhouse could at some point offer MSO-branded iPhones if they could work out deals with Apple.

Then again, music programming’s migration to wireless platforms is still a major work in progress. And some even wonder whether re-purposing linear programming for mobile platforms will be enough to keep users interested. "People are starting to realize that they need to be creating content specifically for this mobile platform," says Steve Ellis, founder and CEO of music licensing clearinghouse Pump Audio. "It’s a slightly different process to create content for a smaller screen and for content that’s shorter [in length]."

MTV, for its part, is already creating "made-for-mobile" content for Amp’d Mobile. Others could follow. In fact, cable operators and music programmers — as well as other music-industry content players — are likely to test several business models in the coming years. "The cable companies are trying to figure it all out," says Opet. "Everybody is."

Music Going Mobile

The Trend: Music programmers increasingly are putting content onto mobile platforms.

The Question: Will traditional music programmers and cable operators work together to bring mobile music content to consumers? Or will content providers try to go around distributors or partner with third-parties who aggregate music and are not affiliated with MSOs?

The Stakes: Experts believe music content will be a major part of wireless service. The degree to which cable operators and programmers can create win-win scenarios could determine the shape and ultimately the overall success of cable’s quad-play rollout.

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