September 5, 2006

Major Record Labels Embrace Mobile Technology

LOS ANGELES -- The music industry, searching for ever-expanding ways to promote acts and generate new revenue streams, is getting increasingly creative in its use of mobile technology.

With ringtones now a well-established product, record labels are turning to mobile games and video.

Warner Music Group recently introduced its first mobile videogame on T-Mobile and Verizon Wireless. The car-racing game features the likeness, voice and music of hip-hop sensation T.I. The company says it is developing additional mobile games from multiple artists spanning all genres. Similarly, Hudson Entertainment, a mobile-content aggregator, has produced mobile games that feature the likeness and music of such acts as hip-hop group D12 and (most recently) the late Bob Marley.

Meanwhile, Capitol Records is supporting the debut album by Dave Navarro's new band the Panic Channel with a first-of-its-kind mobile-TV promotion in conjunction with Sprint and GoTV. For the next three months, GoTV will air free behind-the-scenes footage, exclusive interviews and performances of the band. They will be refreshed every two weeks.

Partner Retail Entertainment & Design, which produces the content, says it is preparing a similar mobile-TV push behind the debut solo album from Fergie of the Black Eyed Peas.

"It's becoming popular and sort of a cachet to have a mobile presence, and that extends outside of ringtones," Hudson Entertainment COO Mike Samachisa says.

Of course, there's more to it than just being cool. Mobile TV and games have the potential to become big business in the near future. According to research group Infonetics, the global market for mobile-video services is set to reach $5.6 billion by 2009, from $46.2 million this year -- an increase of nearly 12,000%. An Informa forecast pegs the more mature global mobile-gaming industry at $7.2 billion by 2010, up from the $2.4 billion expected this year.


To reach these numbers, the mobile industry is relying heavily on recognized entertainment brands to capture attention and encourage more traffic to these fledgling formats. One of the reasons ringtones are so successful is that people have a pretty good idea what they are buying from the beginning because of their familiarity with the original song. The same cannot be said of mobile games or video.

"The only thing you have to go on is a name, a very short description and the price," Samachisa says. Content featuring recognizable names gets more sales. "It's like why you put an artist in a movie. It's because you're trying to connect his music audience to a new platform."

Record labels are taking advantage of this and beginning to publish and distribute this content directly to wireless carriers themselves, similar to what they do with ringtones now.

Warner Music and Sony BMG have developed their own mobile-game publishing divisions, rather than licensing the rights to existing game developers. Universal Music Group partners with sister company Vivendi Universal Games for the same. Sony BMG has even started publishing nonmusic-related mobile games, such as one called "The Shroud" -- a sort of real-life treasure hunt that utilizes GPS technology but no direct music element.

Additionally, labels are amassing a flood of video content that they expect to make available via mobile phones in the near future, incorporating mobile as the third screen to their existing TV and Internet video strategy. Not just music videos, but live performances, interviews and other footage created specifically for mobile phones are in development.

The ultimate goal is to release mobile content in conjunction with an artist's new release, preferably beforehand to generate excitement, but this remains a difficult goal.

"That's obviously the ideal," says George White, Warner Music's senior VP of strategy and product development. "Getting a game completed, tested and ready to launch is even more of a challenge than getting a new hip-hop record recorded, mastered and ready to launch. But that's clearly where we want to be headed."

Particularly frustrating is the fact that this content must be optimized for multiple mobile phones, many of which require different content in different formats.

Development issues aside, there's also the challenge of drawing attention to this bevy of new content. Mobile TV and games combined do not generate a fraction of the traffic that ringtones do. The key, White says, is to direct fans who buy a ringtone to other mobile content by the same artist.

"We're really excited about cross-marketing between these categories, driving traffic from a ringtone promotion to a game," he says. "That's one of the things we feel we can bring to the category and is a theme that we've been working with carriers to do."