3G content deal may boost local developers’ returns

By MARICEL E. ESTAVILLO, BusinessWorld Reporter Smart Communications, Inc. and ePLDT, Inc., both wholly-owned subsidiaries of Philippine Long Distance Telephone Co. (PLDT), on Thursday inked a three-year exclusive deal with leading sports and entertainment firm IMG for highspeed mobile and Internet content. At face value, the agreement could pass for another vendor and content provider partnership, a common arrangement in the local wireless industry. IMG will provide Smart third-generation (3G) international and local sports content, ranging from news clips, interviews of sports celebrities, instructional tips and live video streaming of sports events. But Dan C. Ibarra, Smart usage marketing group head, told BusinessWorld at the sidelines of on Thursday’s press launch that the stake is bigger this time, one likely to signal a new trend in the Philippine wireless business. For the first time, Smart has revised its revenue sharing model much more in favor of the content owner or developer. Mr. Ibarra did not say the exact figure but noted that 30-50% of the sales per multimedia file will go to IMG. To access the IMG content, a 3G Smart user needs to pay P10 per 30 minutes; to download a multimedia file the flat rate is P5 per file, regardless of its viewing length. Commercial launch of these services will start June 28. The current revenue sharing scheme for the multimedia messaging service (MMS) such as images, video clips, and ring tones under the widely-used general packet radio service (GPRS) has developers only getting at most 30%. For instance, only P1 to P1.50 will go to the developer for every P5 ring tone file downloaded. "It doesn’t mean that we are giving in. We just want to match the premium price of the 3G content because it is also expensive to make content for 3G," Mr. Ibarra said. The change in pricing is expected to benefit local software application developers like Icon Interactive, Inc., a small family-owned company. There are an estimated 300 mobile software developers in the Philippines who are all expecting the realization of 3G’s promise, that is, more high-end content to work on. "I am one of those who are waiting for 3G because many exciting applications can be created, using this kind of service," Icon General Manager Arcelio J. Fetizanan, Jr. said in a recent interview. "One potential market is our OFW (overseas Filipino worker) sector since this will address their need for faster and more personal means of communicating with their families here in the Philippines," Vince Parr, ePLDT vice-president for content acquisition and management said the partnership with IMG will likely extend to other service offers beyond 3G mobile phones such as pay-per-view sports content for broadband. "Expect more to come in the next nine months," Mr. Parr declared. "The 3G sports channel will comprise both local and international sports content with a particular focus on sports insight and instruction," IMG Media vice-president Gregg Oldfield said. "3G is the start of a triple-play, multi-year partnership between IMG Media, Smart and the ePLDT Group, which will see the launch of broadband and fiber-to-the home in the coming months," Mr. Oldfield added. IMG Media produces and distributes over 9,000 hours of sports, documentary, docu-drama, entertainment and other content across 200 countries. It has the world’s biggest sports archive with more than 200,000 hours of footage. –Report from BusinessWorld