T-Mobile, Sony Pictures in content deal

German wireless company T-Mobile International AG has agreed to buy and deliver content from the digital unit of Sony Pictures Entertainment Inc. in a move to add film entertainment to mobile devices.

The agreement will let customers of T-Mobile, a unit of Deutsche Telekom AG (DT) in Bonn, Germany, download movie-related content including mobile clips, screensavers, MMS (Multimedia Messaging Service) pictures, theme-tune ring tones and specially-created Java games, T-Mobile said Monday in a statement.

"We view entertainment as a key driver to take mobile data services to the mass market, and Sony is a very big player in the entertainment industry," said Elaine Devereux, a spokeswoman for T-Mobile.

Although T-Mobile has signed numerous deals for entertainment content in recent months, this one is by far the mobile operator's largest. It is also the first global content partnership for Sony Pictures, a unit of Sony Corp. in Tokyo, with a wireless company.

However, the deal between T-Mobile and Sony Pictures is not exclusive. And it will almost certainly be followed by others as mobile operators around the globe seek to enrich their content offerings and major film studios move to tap wireless as a new sales channel.

T-Mobile will begin offering some Sony Pictures' content, such as logos, ring tones and games, in December with movie clips and other, more complicated, video services to follow in the first half of 2003, Devereux. "Video messaging will take a bit longer because the technology is more complex," she said.

The service will be available in Europe and the U.S., where T-Mobile owns and operates wireless networks.

It comes on the heels of the launch of new mobile phones equipped with larger, color screens and technology to transmit data faster.

Numerous wireless companies in Europe and the U.S., including T-Mobile, expect to more than double their revenue from mobile data services over the next three to four years. [See "Nokia projects sharp growth of wireless data revenue," May 31.]The content, targeting customers between 18 and 24-years old, will be priced at €1.49 (US$1.51) to €2.99. It will include over 12 Java-based games including "Stuart Little 2" and "XXX," as well as Sony Pictures' game shows "Wheel of Fortune" and "Jeopardy."

A library of content from classic movies and TV shows including "Men in Black," "Ghostbusters" and "Easy Rider" will also be available to customers for downloading.

T-Mobile and Sony Pictures have agreed to a revenue-sharing scheme which would give the Hollywood studio "slightly over 50 percent of the revenue," Devereux said.

Whether that cut of the revenue is sufficient to keep Sony happy in the long term remains to be seen. "If you ask me, this is a terrible deal for Sony Pictures, and T-Mobile could also be shooting itself in the foot by demanding such a high cut of the revenue," said Bena Roberts, wireless analyst at Current Analysis Inc. in Sterling Virginia.

By comparison, European operators offering the i-mode service developed by Japan's NTT DoCoMo Inc., give content providers 84 percent of the revenue, while O2 (UK) Ltd. offers 85 percent for content delivered over its U.K. wireless network, according to Roberts.

"It's all about money in the entertainment business," Roberts said. "If an operator like T-Mobile wants exclusive content or very high quality content, it will have to agree to a much more generous revenue-sharing model in the future or it can expect to receive cheaper, less attractive products from the studios."

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