As president of Columbia Pictures Television Group in the 1980s, Herman Rush oversaw the studio’s efforts to create and distribute programs for the then-budding contingent of independent television stations and syndicates.
Now Rush is trying to position himself at the leading edge of another revolution in television, except that it isn’t really television anymore. The company he heads, Media Consulting Associates, is working to open the spigot of programming for cellular phones and other portable digital devices.
Based in Santa Monica, Media Consulting has brokered 40 licenses between news and entertainment channels. The firm is riding a wave of new deals this year, including agreements to stream content from ABC News, CNBC, MSNBC, NBC Mobile, The Weather Channel and E! Entertainment. Privately held Media Consulting Associates does not release revenue or profit information.
Rush envisions a media universe in which every cellular telephone, personal digital assistant and laptop computer effectively doubles as a television set capable of displaying a range of movies, television shows and specially designed snippets of news and advertising.
“If you’re an advertiser, what better place to be than in your consumer’s pocket, right next to their keys and their wallet?” Rush asked. “We’re all experimenting with the model and we’re all competing for eyeballs. We’re trying to fill a void in the marketplace.”
Richard Bennett, president of SmartVideo Technologies Inc., developer of technology to bring the programming to mobile digital devices, said technology-based companies like his are in no position to bargain alone with studios and networks hence the deal with Media Consulting Associates.
“Access is critical to getting any kind of deal done in Hollywood,” Bennett said. “Herman and his people can open doors for us. When we started working with them, it became very apparent that none of the principals in SmartVideo had any relationships in the entertainment industry.”
Not everyone thinks cellular phones are poised to overtake television sets as the principal vehicle through which people get news and entertainment.
Even with phones getting larger and adding higher-resolution screens, many viewers simply don’t want to squint for more than a few minutes at displays that are at best a few inches square, said Mike Goodman, senior analyst in the media and entertainment practice in the Boston consultancy Yankee Group.
“At the moment there’s that newness and cool factor to it,” Goodman said. “It’s a market that’s going to develop very slowly, at least initially. It’s a niche service people who have to have their information right away.”
There are also questions about the audience. Of the 170 million cellular phones in the United States, only 20 million are equipped with SmartVideo capability. And SmartVideo reports that fewer than 10,000 people have signed up to pay $12.95 a month for 20 channels that are currently offered.
TV background
Rush, a 40-year television industry veteran, teamed up with a group of similarly seasoned Hollywood types to form Media Consulting Associates at the beginning of 2004. Although the firm traffics in cutting-edge technology, its principals hearken back to an earlier era of filmed entertainment.
In addition to Rush, Media Consulting Associates’ principals are Joe Indelli, the former vice president of Orion Television Distribution; Jerry Katzman, the former president of the William Morris Talent Agency; and Ave Butensky, the former president of the Television Bureau of Advertising.
MCA’s deals between content providers and SmartVideo cover critical areas such as royalties and protections on the legal, technical and copyright fronts. Rush said most of the agreements run 40 to 50 pages and cover substantial differences. For example, a network that creates original programming around the clock for cell phones would likely get higher royalties than one that repackages snippets from existing programming.
Notwithstanding the new technology, Rush said the licensing deals are as old as Hollywood itself and the key to the technology’s success. “I can’t take apart a television set and I can’t take apart a camera, but the public doesn’t care about technology,” he said. “Content is king.”
Goodman said Media Consulting Associates is positioned as a go-between between entertainment companies and cellular video providers. Unlike studios and cable and broadcast networks, entertainment companies and cellular providers do not have a history of working together.
But Goodman said Media Consulting Associates’ ultimate success depends on the prospects of cell phones and mobile devices as a medium for video programming a model that has yet to find its footing.
“If mobile video succeeds, then they succeed,” Goodman said. “While mobile certainly has potential, it pales in comparison at least for the next 10 years to what (entertainment studios) can make from broadband, satellite and cable.”
