Mobile Content Exclusives Come at Large Cost

AT&T, Verizon, Sprint and T-Mobile are paying a very large premium in minimum guarantees to the studios and large media companies.  The large media companies, News Corp, Disney, CBS/Paramount, Viacom, Sony, Universal/NBC and Time Warner are unwilling to sign exclusives for any content over Broadband and Wireless unless there is a very large payday upfront.  As both broadband and Wireless content plays are in their infancy, the large studios are not willing to bet on any one platform.  As with Sirius and XM, the mobile companies will be paying dearly for exclusives which will impact their ability to recoup on their investment both in upgraded technology and upfront content costs. 

The Mobile players will only be in a position to get favorable upfront rates from the brand name content players when they have millions of billable clients.  In the satellite TV domain, DIRECTV, Echostar and USSB paid very high rates for content when they launched…It was the only way to get the content necessary to compete with the cable companies.  DIRECTV and USSB had the foresight to negotiate short-term contracts, betting on their ability to attract subscribers quickly, and thus getting better than rate card pricing when their subscriber numbers grew.