Wireless Outlets

Spider-Man is coming to a phone near you. So are Tiger Woods, Smash Mouth, Britney Spears and Mickey Mouse in a wave of mobile entertainment sweeping across the wireless world.

In the months ahead, a growing number of cellular customers will be able to download ring tones, color graphics, movie trailers and games based on their favorite films, sports celebrities and recording artists.

The trend is being driven by a convergence of three forces. New technology is giving cell phones ever-greater capabilities. Wireless companies that have spent billions upgrading their networks are looking for ways to sell more services through their expanded pipelines. And entertainment conglomerates such as Walt Disney Co., Vivendi Universal and AOL Time Warner Inc. have visions of wireless phones becoming hand-held entertainment centers.

Enticed by that prospect, global media giants and cell phone carriers are scrambling to tie up relationships with one another.

Disney has lined up deals with carriers, including Sprint PCS and AT&T; Wireless, to provide Disney-themed games, graphics and ring tones to cell phone users from the U.S. to Japan.

Sony Corp.’s Columbia Pictures has developed relationships with Cingular Wireless and Sprint PCS to promote such movies as “Spider-Man” and “Men in Black 2.”

Vivendi, owner of the world’s largest music company, recently scooped up the nation’s leading supplier of wireless ring tones based on popular songs, ranging from Weezer’s “Hash Pipe” to the Who’s “Going Mobile.”

“We’re seeing a major push by the entertainment companies to take advantage of the intersection between the ubiquity of cell phones and the digital age,” said P.J. McNealy, research director for GartnerG2, a technology and business research firm in San Jose. “There’s no doubt wireless could have huge promotional opportunities for them.”

Still, much of the excitement is over the potential applications--and potential profit--for the cell phone, rather than what’s currently being realized.

Despite the hoopla and skyrocketing cell phone usage, no one can predict whether Americans will pay to download music or watch movie clips on their tiny screens.

“The wireless phone may be the next frontier for the marketing of entertainment product in the U.S. But the market is fraught with unique challenges,” according to a recent issue of the Entertainment Marketing Letter, an industry newsletter based in New York.

The use of ring tones, graphics and text messaging to promote entertainment hasn’t taken off in the U.S. as it has in Europe. There, cell phones are more sophisticated and networks are equipped to handle the higher speeds required for Internet-ready headsets.

Compounding these technical problems, few U.S. wireless carriers have compatible systems, so a game developed for Sprint PCS’ network can’t be played by AT&T; Wireless or Cingular customers.

But conglomerates such as Vivendi, Disney and Sony can’t afford to ignore the possibilities of wireless, analysts said.

“Not only is it a new outlet, it’s an outlet we are predicting will grow extremely popular with the youth and teen market,” said Knox Bricken, an analyst with Boston-based technology research firm Yankee Group. “The opportunities are huge.”

Bricken forecasts that carriers will see a 430% growth in revenue from these services over the next four years, from $215 million to $1.14 billion by 2005.

Phone manufacturers, eager to boost sales of their hardware, will roll out far more advanced handsets this summer, including such features as faster Web browsing, larger and color screens and the ability to download music, play more elaborate games and in some cases watch streaming video.

A new Nokia cell phone will come with a movie trailer for the upcoming Fox Studios film “Minority Report” ready to play.

Carriers are spending billions of dollars this year to upgrade their networks to carry more data at higher speeds. And they are hungry for new content to fill their expanded pipelines, with services that generate more subscription fees and minutes spent on their systems.

Some entertainment executives envision that within two or three years, mainstream America will be checking movie listings over the phone, downloading trailers, buying tickets and getting directions to the nearest theater--all with a few taps on a phone pad.

For now, though, the ties between studios and carriers are more modest.

Consider “Spider-Man.” For the last several months, Cingular has been promoting the Columbia Pictures movie, which opened this month. Fans of the comic book hero can indulge their passion by downloading Spider-Man graphics, games and movie factoids on their mobile phones.

“It comes down to a desire to open our movies large,” said Rio Caraeff, vice president of wireless services for Sony Pictures Digital Entertainment.

All the major film studios now include wireless marketing as a component of their movie advertising campaigns.

Sony Ericsson is introducing multimedia phones this year that will be used as a platform to promote Sony properties, including both “Men in Black” films and “Charlie’s Angels” as well as games based on movies.

Sony also is developing wireless versions for its own software such as PlayStation games. One new phone model even comes with a built-in joystick.

“We have very high expectations,” Caraeff said. “Mobile gaming is a very big business in Japan, Korea and most of Western Europe.”

Universal Pictures signed a deal with Nokia this year to provide Nokia’s U.S. customers with logos and ring tones from Universal properties, including upcoming movie releases such as “8 Mile,” starring rap singer Eminem.

AOL also has been aggressive in the wireless arena. To help promote its feature “Lord of the Rings,” AOL’s New Line Cinema sent out 20,000 text message coupons to customers of VoiceStream. Fans could show theater managers the coupon message on their mobile phones and receive free posters from the movie.

For cell phone users, the onset of mobile entertainment is certain to create some new, if strange, possibilities. Imagine Arnold Schwarzenegger answering your voice with his signature “I’ll be back.”

A unit of Vivendi is busy buying the rights to digitally record the voices of 100 top celebrities, which will then be offered as a service to wireless carriers later this year. Celebrity voices also will be part of a $6 mobile phone package to be offered by Vivendi for sale in grocery stores this summer.

Customers of AT&T; Wireless can identify callers either by various Disney characters that appear on the phones when a call comes in (one dwarf, say, for each family member) or by ring tones from a catalog of popular Disney songs such as “Zip-A-Dee-Doo-Dah” and “A Whole New World.”

“We have high hopes for a big business,” said Walt Disney Internet Group President Steve Wadsworth. Disney also has a deal with Sprint PCS, which will offer games based on the Disney features “Monsters, Inc.,” “Atlantis” and ESPN’s 2-minute Drill.

“We feel that wireless gaming is the next step in the evolution of gaming,” said Sprint PCS spokeswoman Stephanie Walsh.

One in six U.S. cell phone users, or 21.6 million people, will play games on mobile phones this year, with the number increasing to 93 million in 2006, according to a forecast by research firm Datamonitor.

Disney’s wireless push accelerated after its successful foray two years ago into mobile-obsessed Japan, which offers a glimpse into what could eventually come to the United States.

Through alliances with NTT DoCoMo and two other carriers, Disney said it has built a profitable and expanding business in Japan. The company now offers 13 subscription-based services to 2.5 million customers. Among the services: a Disney fortunetelling service, Pooh screen savers, ring tones and greeting cards, and virtual attraction games based on Tokyo Disney Resort.

Disney also operates a wireless fan magazine in Japan, which it used recently to promote the opening of the Disney/Pixar Animation Studios hit “Monsters, Inc.”

“We see it as an opportunity to reach consumers any time, anywhere,” said Mark Handler, executive vice president of Disney’s international Internet operations.

But whether Disney’s success in Japan will translate in America is anybody’s guess.

“It’s too uncertain to say whether the DoCoMo model will be a big money maker for the company,” said Larry Shapiro, executive vice president for business development and operations of Walt Disney Internet Group.

Though charges vary widely depending on the type of package the carrier offers, customers pay an extra $1 to $5 a month for individual ring tones and graphics, with entertainment companies getting about 10% of the revenue as transaction or license fees.

But the industry is so new that no one is making money off mobile entertainment, which faces a host of challenges. Among them are how to bill and market services without offending wireless customers with unwanted advertising.

Scores of telecom businesses that built their models around the possibilities of delivering services through “third-generation” networks have floundered because carriers have been slow to adopt new technology.

Vivendi has painfully learned that lesson with its multi-portal Vizzavi Internet business in Europe.

The joint venture with the United Kingdom mobile operator Vodafone has failed to live up to the promise of delivering news, sports, movies and games through cell phones, personal digital assistants and personal computers.

“We were late in terms of developing the right devices for our customers, who were not able to connect at the right speed and the right price,” said Philippe Germond, chief executive of Vivendi Universal Net.

Vivendi is taking a different tack in the U.S. The company is building relationships with carriers through its new wireless-services subsidiary rather than spending millions on launching a new portal.

Robin Richards, CEO of Vivendi Universal Net USA, has high hopes for wireless in America.

“This is a business that three years from now is a $1-billion business for Vivendi.”

*

For related stories and photos, go to www.latimes.com/mobile tech.

*

(BEGIN TEXT OF INFOGRAPHIC)

More Than Calls

(text of infographic not included)