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Your Favorite TV Show Is Calling


FOX's (FOX) thriller 24 is already a major TV hit in the U.S. and across much of Europe. And now a scaled-down version of the show is coming to an even smaller screen -- the one on your cell phone. Later this month, Fox Broadcasting Co. will roll out one-minute "mobisodes" -- mobile episodes, get it? -- of 24 on Europe's Vodafone Group PLC (VOD) network. And starting in February, Verizon Communications' (VZ) U.S. subscribers may be able to get mobisodes of the show on their cell phones, too. If 24 is a wireless hit, the media giant may follow up with other programming, including reality shows.

Fox has plenty of company. With viewers increasingly abandoning TV for the Internet and video games, studios, and other media outfits are rushing to jump into the fledgling market for cellular video. In just the last month the likes of Fox, Warner Bros. (TWX), and ESPN have all signed deals to bring everything from sports highlights to comic books to super-small screens.

With an estimated 170 million phone users out there, it's a potentially huge market. Industry analyst In-Stat/MDR figures the cell phone video market will generate just $32.7 million this year, but that could jump to $1.9 billion by 2008. The question is, will Americans want downsized video -- and if so, can companies make money on it? "The business model is far from clear," says John Burris, Director of Wireless Data Services for Sprint Corp. (FON). "But this is a real business; a lot of content players want in."

Cellular providers and media giants are hoping to duplicate the success of video phone services overseas. Cell phone users in Japan and Korea already can watch TV on their handsets, and Vodafone offers sports highlights in Europe. Such services have been limited so far in the U.S. because the rollout of high-speed cellular networks has lagged behind other countries. Even now, the TV shows offered by 14-month-old California startup MobiTV are jerky at best.

All that could change this year. New third-generation phones running on beefed-up digital networks will hit the market during the first quarter. Cellular providers say they'll be capable of delivering near cable-quality video.

With the technological pieces finally falling into place, entertainment companies are scrambling to come up with programming. Warner Bros. aims to put Looney Tunes on some phones, as well as behind-the-scenes clips of its teen soap The OC. MTV Networks is negotiating with Microsoft Corp. (MSFT) to stream rock videos on AudioVox Corp. (VOXX) and other phones. And Verizon is expected to announce deals with several media companies, say industry insiders.

LOTS OF CLOSE-UPS

Success, of course, will require content that people actually want to watch on their cell phones. Analysts expect one- to three-minute video bursts to catch on initially -- what Sprint's Burris calls "snack TV." The studios also have to tweak their content for those minuscule screens. In shooting its cellular version of 24, for example, Fox featured more close-ups. At the outset, shows will be tailored to sports and news junkies and the younger viewers who live on their cell phones -- and are the advertising sweet spot for TV execs.

How will companies make money? Subscriptions could be one way. MobiTV has signed up roughly 100,000 customers who pay $10 a month for more than 20 cable channels. Verizon and Fox won't reveal the per-mobisode price for 24. But Warner expects to charge as much as $5.99 for each snippet of The OC Insider; it will also offer the show as part of a $24.99 yearly subscription to a fan club. Others plan to sell ads. Mobliss, a Seattle marketing firm that also makes original programs, is working with Nike Inc. (NKS) and Coca-Cola Co. (KO) to cram product placements into its shows.

Another wrinkle: With TV rights to most shows still held by broadcasters rather than the media outfits that produce them, producers are being forced to come up with duplicate programs. The cell phone version of 24, for example, will feature a new cast that doesn't include star Kiefer Sutherland.

With so much up in the air, some players are hanging back. "We're not sure it's a real business yet," says Sony Pictures Entertainment (SNE) Chairman Michael Lynton, whose company is focusing instead on Internet downloads of its soaps. "But we're watching closely to see how Fox does with 24." With 170 million super-small screens out there, he'd be foolish not to.

By Ronald Grover in Los Angeles


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