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NBC's Zucker Downplays Cell Content

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DAVOS, SWITZERLAND NBC Universal CEO Jeff Zucker challenged the mobile phone industry to cut entertainment companies better deals for providing content to handsets.

Zucker complained Friday that carriers award just "10 percent of the economics to the content companies," providing little incentive for NBC Universal to pay much attention to the well-hyped mobile media opportunity.

"It's actually not that important," he said. "We're obviously playing in this world, but playing in a small way."

Zucker was speaking alongside Sony CEO Howard Stringer, FCC chairman Kevin Martin, Google CEO Eric Schmidt and others at the World Economic Forum in Davos, Switzerland.

"The consumer will actually demand the content, and they'll demand a better experience. And it will force both of us to figure out the economics around who gets how much," he said during a conversation dubbed "The Future of Mobile Technology."
 
Schmidt suggested, though, that the potential for earning oodles more money from mobile advertising should not be discounted, saying that predictions of less than $1 billion in U.S. revenue by 2012 is "obviously low." The key, he said, is open platforms.

The mobile Internet can be more powerful than the PC version because of GPS technology that allows for location-based features, including advertising.

Browsing is a challenge because of the absence of a large keyboard. "The problem with your fingers is they haven't changed in 10,000 years, " Schmidt quipped.

But an open system, he said, will encourage the creation of "applications that none of us can possibly imagine. That is the re-creation of the Internet. It's the re-creation of the PC story. And it is before us.

"It will happen in the next year," Schmidt predicted.

"It seems obvious," he said, "that advertising, which works so well on the traditional Internet, should also work well on the mobile Internet. After all, they know where you are."

Martin was sympathetic to Schmidt's call for an open platform with open standards but acknowledged the need to strike a balance between openness and competition. The FCC, he said, doesn't "need to be picking technologies."

Stringer noted that shortform content, while not terribly impressive yet, is about all that U.S. handsets can handle.

 "You cannot actually complete a phone call in California," he said. "So it's hard to get terribly excited in Hollywood about movies on the phone yet. The network itself is so appalling."

Drawing on an example set by the music industry—and addressing Zucker's concerns—Stringer said, "It won't be easy to hang onto the price of content."

In fact, those who cling to the axiom that content is king are wrong. "The customer is king," he said. "When you defend the status quo when the quo has lost its status, you're in trouble," Stringer added.

Zucker also said that NBC, at no small cost, will feature 2,200 hours of live wireless coverage of the Beijing Olympics in August. "It will be a real telling moment for us," he said.

"That's pretty amazing from a company that doesn't consider wireless very important in the near term," said Fortune magazine senior editor David Kirkpatrick, the moderator of Friday's discussion.