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The Plot Line
In mobile TV, the main players fall into three groups: the wireless phone companies, which control the network across which all data services – voice, Web access, and text messaging – run; the major broadcast networks and cable channels, which create television content; and the companies that develop technology – both hardware and software – to enable television streaming over networks originally designed for voice traffic. The companies in this last group increasingly hope to act as aggregators who take content from broadcast partners and resell it, along with their own products, to the wireless carriers.

Much like the cable industry, where everyone must bow down before big operators such as Time Warner and Comcast, the mobile-TV industry has its kings: the wireless phone companies. In the Boston area, ESPN can’t get on the television without striking a deal with Comcast, which controls the relationship with the viewer, the set-top box, and the cable lines that run into your house. Likewise, if ESPN wants sports highlights on a cell phone, it must make an agreement – either directly or through a third-party aggregator – with one of the big three mobile-television providers.

And the way the agreement works gives still more power to the wireless carriers. A broadcaster is not paid based on the number of minutes that customers spend watching its content; instead, it is paid a portion of the fee charged for whatever subscription package it is a part of.

As the medium grows, mobile-TV viewers will have multiple subscription options to choose from – much as there are tiered pricing options when you sign up for cable. The mobile providers can, by power of their pipe, determine who gets easiest access to users’ phones. In the world of cable, broadcasters jockey to make it into the expanded basic cable channel package, which gives them the best chance to attract the greatest number of viewers. This arrangement makes good financial sense for carriers and broadcasters, but it doesn’t best serve consumers.

Still, the carriers are not operating in a vacuum; broadcasters do have some power. ABC and Fox have been among the most aggressive in developing mobile content, with the hope that they can build enough viewer loyalty to allow them to strike better deals with the mobile providers.

In the cable world, companies like Disney or GE, which own many channels with large audiences, can cut cherry deals that give them high per-subscriber fees, because the cable companies know that without content that is in demand, they will lose revenue. It pays for Comcast to accommodate Disney, because Disney’s ESPN brings in subscribers. Meanwhile, small networks sometimes have to pay for placement on less-frequented tiers such as the on-demand services.

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