Capitol Broadcasting’s innovative NewsOverWireless (NOW) operation lets stations use its 11 different offerings to generate advertising and subscription revenue from mobile customers. NOW’s GM describes the mobile opportunities that lie ahead for stations and the importance of their looking at mobile as an overall ecosystem, rather than just as a one-off solution. “This is about having a mobile strategy.”
Many TV broadcasters have embraced mobile, offering various text and video services to users of cell phones and other handheld devices.
But Capitol Broadcasting Co., owner of WRAL Raleigh, N.C., and four other TV stations in North Carolina, has gone much further, forming a company that develops technology that allows other local media to create and distribute content to the mobile masses.
After five years in operation, NewsOverWireless is thriving, offering stations 11 different ways they can generate advertising and subscription revenue from mobile customers.
Among them: mobile Web access through customized WAP sites; downloadable apps for distributing text, images and video clips; video channels on the Sprint TV and Verizon V CAST pay platforms; a new iPhone app that allows stations to deliver a full-blown multimedia service on the popular smart phone and the iPod touch; and SMS text messaging.
NOW’s turnkey solutions have attracted 135 TV stations belonging to CBS, Meredith, Scripps, Gannett, LIN, Post-Newsweek, Raycom, Allbritton and many others.
Sam Matheny is general manager of NOW as well as the Capitol Broadcasting executive in charge of bringing mobile DTV to market. In this interview with TVNewsCheck Editor Harry A. Jessell, Matheny talks about mobile’s potential in all of its manifestations.
An edited transcript:
You introduced an iPhone app earlier this year. How big is the market for that?
There are 20 million iPhones out there and, when you include the iPod touches, it’s up over 30 million. That’s significant, but in the overall market in the U.S., you’re talking about 270 million mobile phones with some of those being two-device people. So, the iPhone is still a fraction of the overall market. But the unique thing about iPhone users is that they are veracious consumers of content and they are watching a lot of video and consuming a lot of page views. We’re very excited about the iPhone app, but we definitely view it as one piece of a much larger puzzle.
I understand there’re going to be other smart phones coming out to compete with the iPhone, including the Palm Pre and the Google Android. Are you going to create apps for those platforms, too?
We will treat it very much the way that we did the iPhone. We did not run out and launch an iPhone app as soon as the App Store opened. We looked at the market and how it was developing. We saw the penetration and the uniqueness of what iTunes offers and the way that Apple has been able to create an environment that really fosters adoption. It’s yet to be seen whether the other device folks can do that. So, we’re going to take a look at them and, if they merit it, absolutely, we’ll be there.
Did you write the iPhone app yourself?
Yes, we did. One of the things that is unique about us is that we write and own all of our own software so we have complete control of the intellectual property. That really provides stability for folks who partner with us as opposed to agreements where there’s all sorts of licensing and sublicensing and other parameters that may come into play as you get further down the road.
LIN is your big iPhone app user? Do you have any other groups signed up for that?
Oh, yeah. We also working with Meredith and Scripps and there are a number of stations, including [Midwest’s] KFMB in San Diego.
Do you have any sense of how usage of local online media is being split between the desktop and mobile devices now?
No, but what I do know is that mobile usage is growing significantly as more and more smart phones come out and as people begin to realize that a phone isn’t just for making phone calls anymore. We’re really watching our mobile usage grow dramatically.
What are people using their phones, their mobile devices, for — text, Web access, video, what?
The No. 1 thing that people are doing with their mobile phones is sending text messages. A lot of that is peer-to-peer communication. I was at a conference last week where they said the number of text messages sent now outpaces the number of phone calls that are made in a month. If you think about it, it makes a lot of sense because if I’m in a text message conversation with somebody, I might have to send two, three, five, 10 messages to complete what I might have said in one phone call. After texting, I would say that the next thing is mobile Web.
Which means I’m hopping on my phone and I’m browsing the Internet. I’m doing that by opening up my phone and typing in a Web address or by using the menus that the carriers offer me as part of their service. The unique thing about working with NewsOverWireless is that we have positioning in both of those.
Are you a strong believer in the business of stations’ offering video clips?
Yes, very much so. That area is probably showing some of the highest growth, but is also starting from the lowest base. We’ve seen tremendous adoption. We’re getting millions of viewers consuming video content and so we absolutely believe in providing video on demand where folks can hop on and see the latest breaking newscasts or the latest weather forecasts or get a sports update or actually home in on a particular story. It’s a powerful way to get different information to folks and it expands the television station’s core audience.
And that’s basically a subscription service.
It doesn’t have to be, but it is today. With Verizon VCast, people are paying a flat fee of usually $15 a month and that gives them access to the entire menu of content that Verizon offers. Sprint TV actually offers it on an a la carte basis where people come in and pay a separate fee of $4.95 month to access the local content.
You’re also the point person at Capitol responsible for mobile DTV. In April, WRAL announced that it would offer a mobile service to city buses. Can you tell me a little bit more about that?
What we’re doing is putting mobile DTV onto the bus system and we are doing it in a way that is a simulcast of WRAL. It’s presented on the bus in a screen that has other components, including a Doppler radar image, which is continually updated; forecast information that’s continually updated; a news ticker that is continually updated; as well as some advertising.
The transit authority is very excited about it because they believe it enhances their public transit system. It provides an information and entertainment service that makes riding the buses more appealing. They pride themselves on innovation. They were the first city in the U.S. to deploy LED lighting in the parking decks. They have deployed hybrid buses, a new technology to provide a cleaner environment. They view this as a new technology that’s going to provide a better experience.
So this is just not a showcase. This is something that you see evolving into a real business.
Certainly. If we’re able to generate positive revenue from this, then it’s a way for them to reinvest in the transit system without having to do any kind of new taxes or anything.
It helps us, too. It’s going to take time for the consumer electronics folks to start producing and selling personal mobile DTV devices and this is a way to really get out in front of that, to educate folks about mobile DTV and also to set the stage for what we hope is going to be a lot of new eyeballs and the ability to reach folks at times and in places that we can’t today.
So, like other broadcasters, you will be starting with a simulcast service. Where does it go beyond that?
We continue to look and explore and investigate, but I will say at this point what we really are most excited about is the idea of reaching people in places and in ways that we haven’t been able to reach. So right now it’s really more about the traditional business of broadcasting, which is simulcasting.
Now you have relationships with the carriers through NOW. Are they going to put mobile DTV tuners into their phones or allow that to happen?
I certainly believe they will over time. I don’t think it’s something that’s going to happen immediately. It’s going to take some time. They’re certainly conversations that we’re engaged in and interested in advancing.
Why do the carriers get to dictate to the set manufacturers what hardware they’re going to put in the phones?
Typically, in the United States, the carriers are subsidizing the handset cost. You can walk into a carrier’s store today and get a great new phone for free or $50 or $200. Well, you know, that handset wasn’t really free or $50 or $200. That handset was really maybe $700 or $800. So, as long as carriers continue to subsidize handsets, they get to influence how they’re built. It’s hard to argue with that.
Have you gotten any push back from copyright holders and programmers about simulcasting their programming for mobile?
We have not received anything directly. It’s certainly a conversation that we are anticipating happening, but in simulcasting you have the same tower, the same signal, the same coverage pattern. It’s not like I am taking this content and putting it on the Internet and making it available on a global basis. It just so happens that there’s a new receiver out there that can pick it up as folks are walking around the city or making their commute.
Other than mobile DTV, what’s the next big thing in mobile video?
The next big thing will probably be a series of small things. You will continue to see a drive for more content being made available and for new business models. One of the things that we enable is offering pre-roll advertising with local video. There are some companies that are doing that on a national basis, but we’re the only ones that are making it available to our partners and affiliates on a local basis. The viewership numbers are getting up to a point where it can be sold and included in a package. We’ve even got stations that have sold it on a stand-alone basis.
Is there anything else you want to say?
We look at mobile as an overall ecosystem. Different users use it different ways and we have solutions that help stations extend their brands to all of these and drive multiple revenue streams. It’s not a one-off mobile Web solution. This is about having a mobile strategy.