Watch This!

Potential seen in on-demand content

The Toxic Avenger might have ended up just another cult classic if new streaming video technology from Kanakaris Wireless hadnt made it possible to watch the film on the PocketPC.

The company claims to be the first to stream a full-length film wirelessly. Its catalog also includes James Dean: Race with Destiny and Bruce Lee in The Chinese Connection. Kanakaris, which has staked its financial fortunes on the global on-demand delivery of movies to both wired and wireless devices, is sure that competitors will follow soon.

Analysts see the potential. NPD Intelect Market Tracking says 48 percent of cell phones purchased at retail stores in the second quarter of 2000 are Internet-ready, up tenfold from the year before. Research firm International Data Corp. forecasts that by the end of 2002, there will be more wireless subscribers capable of Internet access than wired Internet users.

Many content companies say the space is ripe for a land grab. "No ones questioning this is a good opportunity," says Robert Tercek, president of the applications and services division at PacketVideo, which makes software that enables content providers to develop and deploy wireless video and audio.

But who really wants to watch a movie on their wireless phone or personal digital assistant?

"The attraction is the freedom to watch whatever you want, wherever you want," says Jim Golff, Kanakaris director of content acquisition. "Once you have a great plethora of stuff to choose from, if youre sitting at an airport or driving cross country, if you can choose whatever you want to see at the moment, thats the attraction."

To be sure, users cant exactly get everything they want to watch wirelessly yet. The amount of content is minimal compared to other media. In fact, its tough to measure how many people are even trying to access content through wireless devices.

PacketVideo is running a showcase service that helps companies prepare for their commercial deployments, some of which could happen as early as this year. Participants include, AtomFilms, Sony Pictures Digital Entertainment and Warner Bros.

The early trials have turned up some interesting findings. To no ones surprise, consumers enjoy news and short-form entertainment. What did shock Tercek, a video-industry veteran, was that people liked to watch live video on their Internet-enabled phones and other handheld devices.

A number of people, he says, liked to check the live cameras they set up either to watch their kids at play or as a home security measure. "That resonated with people," Tercek says. "And thats a sticky thing. We think thats good content."

Good enough, he says, to pay for. Tercek believes the subscription model that is struggling on the wired Web will prove successful in the wireless world. "On the Internet, expectations are that everythings free. In the wireless world, the expectation is theres a cost for everything."

Many content players are keeping an eye on the Japanese communications company NTT DoCoMo and its i-mode service, with which more than 19 million users connect to the wide-open Internet through their phones. Users are charged a fee for access to some content, such as news.

U.S. carriers are more inclined to offer a "walled garden" of content, meaning users can only visit sites presented in a particular area, such as the opening screen. But Cliff Rasking, a senior analyst at Strategy Analytics, says its a model that is unlikely to survive. "Customer frustration with both the lack of choice and the desperately poor user experience of current solutions will lead to disenchantment, higher churn and ultimate failure of walled gardens," he wrote in a recent report.

Media giants including Sony and AOL Time Warner are intrigued by the chance to brand wireless content. Both have invested in PacketVideo and are developing wireless Web content. Sony is working on a wireless, multiuser version of a dating game show, as well as a version of SoapCity, a soap opera news and community site.

Warner Bros., a division of AOL Time Warner, is creating four original animated series, and Comedy Central also plans to deliver wireless content.

CNN, another AOL Time Warner property, has been in the market since February 1999. Today, more than 90 million subscribers in 24 countries access CNNs mobile service.

Mitch Lazar, vice president of business development, new media, at Turner Broadcasting System, says at this stage of the wireless Webs development, manufacturers and content players have to be smart about developing and marketing their products.

"We really have to be realistic about the marketplace and not get the cart before the horse or over-hype," Lazar says. "We need services that are convenient, that provide the type of news and information that is more personalized in their approach. The content we produce in this area is different from TV and different from the Web."