Time Warner/Sprint Combo Moving More Content to Wireless Devices?

The potential combination of Time Warner and Sprint, which was still only in the discussion phase as of January, has caused a great deal of speculation about how it would change the mobile content marketplace. Undoubtedly, the merger would further promote the "any time, any place," content model, but it would also continue to concentrate the media market. This powerhouse partnership, if it were to come to pass, would give Time Warner and Sprint a so-called "quadruple play," which would allow the partnership to offer a bundled package of high-speed Internet, television, long-distance, and wireless telecommunication services.

The combination would provide Time Warner—which has media holdings that include movie studios, CNN, and Time magazine—with a built-in content delivery marketplace, and Sprint, with some enviable content resources. "Content is the name of the game," says Randy Lowe, telecommunications specialist and partner at Davis Wright Tremaine LLP. "That's why Ted Turner bought MGM studios several years ago. There's not enough content out there, so people can exact a good price for it."

Though Time Warner receives a great deal of attention, Michael Grossi, vice president of Adventis, a telecommunications consultancy, points out that it is far from the only major content provider eyeing the wireless market. Universal, Sony, and Disney are all looking at private-branded wireless services for distribution of their content, according to Grossi. Disney has already announced its own wireless services, to be launched later this year. Disney subsidiary ESPN has also announced the 2005 launch of wireless services.

"It's a new medium for content providers to push content through," Grossi adds. If they can provide content via wireless devices, it would lead to higher demand for it, meaning more revenues for the providers. Additionally, the provider that can provide content on wired or wireless devices will have a better consumer following than those limited to fewer delivery channels.

"It helps the owner of the content if they also control the [distribution] channels," Lowe says. The consumer theoretically can benefit from receiving one bill for a bundled package of services, potentially at a lower price than for the services on an a la carte basis. However, that's also the theory behind the so-called "triple play" of wired telecommunications, Internet, and television.

The jury is still out on whether these bundling arrangements are indeed better for the consumer as well as for the companies providing them. Therefore, Lowe expresses uncertainty about whether the Time Warner/Sprint and similar partnerships will ultimately come to pass—profoundly impacting the business model—or if content providers will continue to license products to wireless providers. Either way, analysts believe the mobile content market is set for growth. As such, content providers are working hard to develop content-targeted mobile devices, according Harry Jenkins, vice president of technology for emerging media Scripps Networks. Scripps Networks operates cable channels HGTV, Food Network, Fine Living, Great American Country, Shop At Home, and DIY.

"We're trying to create new shows for mobile channels," Jenkins says. But he points out that wireless content must be created specifically for the delivery medium; that it must be short in length and compact in terms of bandwidth requirements. People aren't going to watch a traditional television program on a mobile device, according to Jenkins. "What we're after is a quick hit," Jenkins says, pointing to similar developments in Europe and Asia, where the underlying "third generation" telecom infrastructure has been in place for a longer time.

Whether or not the Time Warner/Sprint partnership comes to pass, Jenkins foresees companies like Sprint offering sports scores, stock quotes, video, or other content by dialing a number on Sprint handheld devices, along with the development of interactive content and content linked to search capabilities earmarked for the mobile market.

(www.sprint.com; www.timewarner.com)