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Delivering "Lost" and "Desperate Housewives" television show content to wireless and mobile devices such as Apple Computer's video iPod may be only the beginning for the Disney ABC Television Group.
The future growth for the division will come from delivering media content on mobile devices, said Albert Chang, executive vice president of digital media for the Disney ABC Television Group. He spoke Monday at the Yankee Group Mobile Entertainment Summit in San Diego.
Chang recently stepped into a newly created position whose role is linked to Disney's initiative on digital media. "My focus is to build a business based on wireless, video in-demand, broadband, interactive television, and other electronically distributive devices and content," he told TechWeb. "We expect our mobile video subscriber business to reach 14 million in 2009, up from about 200,000 today."
That growth will come, in part, from the deal Disney struck with Apple to offer downloadable content for television shows "Lost" and "Desperate Housewives." While Apple's video iPod only began shipping last week, Disney already has plans in place to expand available content early next year
A major issue slowing Disney and other studios from preparing television content for distribution on mobile devices regards intellectual property rights. In the past, contracts for content typically have been limited to television broadcasting. Holding up the process, in part, is getting legal rights clearances from musicians, actors, writers and other people involved in creating the original content, Chang said.
"That's one of the reason you don't see a lot of content for wireless devices right now," he said. "We own the shows "Lost" and "Desperate Housewives" from beginning to end of production, so now when we know a show will be good we negotiate ahead of time to clear distribution on all platforms."
Other challenges include repurposing the content for small screen size on devices, video is less than the highest quality, and there is limited content available. As for trying to download sports or news clips to a cellular phone, it still takes too long, nearly a minute, said Keith Mallinson, executive vice president for research at Yankee Group.
Both analysts and mobile telecommunication carriers said it's still unclear how large the subscriber market is for mobile video content. "Wireless carriers seem to be pushing more than customers are pulling," said Michael Hollon, market research manager at Leap Wireless International Inc., a mobile carrier in San Diego.
For now, downloadable ring tones for cellular phones have proved most successful in the mobile device market. "It's the most established," said Keith Mallinson, executive vice president for research at Yankee Group. "In 2004, the market for ring tones was $250 million in the U.S., and we forecast about $1.1 billion by 2008," said Mallinson. "It's only one market but it gives people confidence that there is something to this mobile content."
Perhaps that's why Disney is moving ahead with plans to expand content to mobile devices. Chang admits it will take time to build, "but imagine the world when we get there."