Finding new consumer "channels" isn't just an ad-agency obsession. The giant media sellers are racing to stake out territory in cutting-edge technologies, such as cell phones, in a bid to expand audience and revenue streams. And the race is driven by need, as traditional media outlets such as cable, satellite, TV and radio present less and less growth potential.
In the past year, several media companies have begun experimenting with alternative delivery systems ranging from broadband applications to cell phone technology to distribute their content and brands. But last week, Viacom, which owns some of the most powerful younger-skewing brands, such as MTV, may have set the tone for the entire industry—and illustrated the urgency of finding new media channels when it reported a fourth-quarter net loss of more than $18 billion, in part because of lagging performance of old-media holdings such as radio.
When the big media companies with piles of cash and a huge stake in traditional media begin talking about embracing alternate distribution channels as a core strategy for growth, it's clear the future is closer than some think. "All of the [media] conglomerates have a lot of really smart people trying to find new ways to monetize their content," said Brian Wiesner, an analyst for Interpublic Group's Magna Global who authored a recent report on 3G, the latest upgrade in cell phone networks that allows video to be streamed on demand.
Although the market is still small and lacks the critical mass to attract major advertisers, technology moves fast. In a report last week, eMarketer predicted that by 2008, there will be nearly 70 million broadband households in the U.S.
"Broadband telephone should be commonplace by the end of the decade," said Wiesner, who believes that companies are adopting the strategy of experiment now, benefit later. "It's a land grab. It matters that you were there first."
No longer is the technology in the gee-whiz theoretical stage. It's now entered the realm of the practical. "After some years of swinging toward distribution, it's clear that the balance of power is moving back toward content," Tom Freston, co-president and co-COO of Viacom, said during last week's earnings call. "Technology will play a big role in creating significant new opportunities for content as we connect with our audience in new and expanding ways, be it in broadband, wireless and through other consumer electronic devices. We expect to be big participants."
In January, MTV Networks jumped into the wireless world through an agreement with Verizon to offer made-for-mobile programming associated with MTV, VH1, CMT, Nickelodeon and Comedy Central. Some of the abbreviated program brands that will be available include VH1's Best Week Ever, Comedy Central's The Daily Show with John Stewart and Joke of the Day and Nick's Dora the Explorer.
On March 7, Viacom's Showtime network will Webcast, through a deal with Yahoo!, the premiere episode of Fat Actress, starring Kirstie Alley, at 10 p.m.—the same time the series will debut on the pay-cable network. America Online staged a similar premiere event with the WB last year for the premiere of Jack and Bobby.
On the broadcast side, after years of shunning the Web, Infinity Broadcasting last year embraced an Internet strategy through a deal with AOL to stream five of its biggest name-brand radio stations in New York, Chicago and Los Angeles.
There are even new high-tech delivery technologies Viacom is exploring for its outdoor division that allow advertisers to append their static outdoor signs by delivering messages directly to phones and PDAs—something Frito Lay is experimenting with in New York for its Doritos brand.
During the company's year-end conference call last week, Sumner Redstone, Viacom's chairman and CEO, declared that 2005 would be the year "of the reinvention of Viacom" through "an accelerated expansion into new and emerging platforms."
Viacom isn't alone in mining emerging technologies. Through an agreement with Verizon Wireless, Fox Entertainment Group earlier this month launched three original "mobisodes"—one-minute, bite-sized episodes designed to be consumed on tiny screens. One of the mobisodes, "24: Conspiracy," is based on Fox's prime-time drama, 24. The other two, "Love and Hate" and "The Sunset Hotel," are original soap operas.
During last summer's Olympics, NBC's deal with AT&T Wireless delivered a host of Olympic content to phones, including video highlights from a dedicated Web site, results, trivia and a sweepstakes. NBC expanded that strategy last fall for some of its new shows such as Las Vegas and Joey.
Disney's ABC delivers its news content to cell phones through a deal with Sprint and has been actively testing various formats including ESPN Mobile and disposable DVDs.