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One of the most enthusiastic entrants into mobile content isn't a media company at all. The NBA has made mobile phones a key part of its marketing strategy by offering fantasy leagues, team wallpaper, game stats and video highlights for mobile phones. With network-television audiences shrinking and cable-TV viewers so dispersed, mobile phones present a unique opportunity for the league to reach its fans through the one line they always have open. Later this year, Apple plans to shake up that industry even further. The company that transformed digital music is jointly developing a cell phone with Motorola. Called the Rokr, it will merge the iPod with a mobile phone in what could potentially be a huge new market for both digital music and cell phones--that is, if the phone venture can find a carrier willing to enter the uncharted territory of music via phone.
To handle all this sophisticated video and music content, the big carriers are making massive investments in their networks. Sprint is pouring $1 billion into an upgrade this year, and Verizon is rolling out its high-speed data services network. At least for now, they will be the gatekeepers (Sprint has taken a stand against cell-phone porn, a big business overseas). Meanwhile at least one carrier is already bypassing the small companies for cell-phone services: Verizon is relying on household names like CNN and NBC (for news) and Comedy Central and VH1 (for entertainment) to attract users to its new VCast service.
What's the bottom line? Wireless companies like Jamdat and Infospace are getting panting attention from venture capitalists convinced that cell-phone services are their newest gold mine. Wall Street has started to grill every consumer company about its wireless strategy. But this hypefest isn't quite like the dotcom delusion. "This started with a business model," notes Disney's Shapiro. "We're being prudent."
That's good news for investors, but it may also mean that the cell-phone-services industry will turn corporate before you know it. As long as companies are trying to figure out what works by flying the next big idea past a bunch of teenagers, they may take chances on some zany concepts. But once the commercial winners are clear, more outlandish forms of content may fade away. Spam and advertising will creep in too. That makes now an ideal time for all of us to enjoy the wacky creation of a new industry. Your teenager's cell-phone habit might be driving you crazy, but it's jolting the tech world with a hit of much needed creative chaos. --With reporting by John Hollis/ Atlanta, Coco Masters/New York, Adam Pitluk/ Houston and Leslie Whitaker/Chicago