David Murphy talks to the ROK Entertainment Group Marketing Director about the company's efforts to put high quality video content on to mobile phones
Technology company ROKs big idea is to bring full-length, full-screen video content to mobile phones. Its attack is two-pronged. First, theres ROK Player which delivers movies, music videos, and episodes of popular TV series to mobiles on pre-recorded 64MB MMC (MultiMediaCard) memory cards, which retail for 17.99 each. Second, theres ROK TV, which delivers a bouquet of 12 TV channels, including live news from ITN and CNN, and 5-minute content packages from channels including National Geographic and Cartoon Network, to both 2.5G and 3G handsets.
Both services currently work on a small number of Nokia, Symbian-based handsets, which nevertheless, represent a large number of the handsets sold in the UK. And in 2006, the company will roll out services for Microsoft OS-powered devices, bringing ROK technology to Microsoft-powered PDAs. It will also pre-load ROK technology onto a number of popular smartphones.
We recently met with ROK marketing chief Bruce Renny to find out more about the companys plans. He had so much to say that were running the interview in two parts. First, he tells us about the ROK Chip. In part 2, well find out more about ROK TV
MM: So tell us about ROK.
BR: We were founded three and a half years ago, with the aim of creating innovative technology to deliver full-length content to mobile phones. There was no rocket science in that. The rocket science has been in the application of that mandate. We have invented a product called ROK Player. This is a process whereby we can take full length content, whether thats a movie, a TV show, or a music video album, condense it right down, and put it on a memory card that you can play it on your phone. Its like a DVD for your mobile phone; theres no streaming or downloading involved.
ROK Player combines content compression with autoloading, fast forward and rewinding, auto-pause for incoming calls, and content DRM (Digital Rights Management) that we have written ourselves from scratch. Thats been vital, because without the content DRM, there is no way we could have licensed anything from anyone. The content owners of any valuable triple-A content would not have allowed it. Our content DRM prevents the ROK Chip from being played on your PC. It can only play on your phone. It cannot even be squirted to anyone elses phone.
MM: Can you tell us more about the content?
BR: We have licensed hordes of content. We have licensed around 100 titles and currently have around 50 available, with more coming on-stream all the time. We are in around 300 retail stores across the UK, including The Link, JAG stores in the west country, and the Nokia stores, and also online at Rokplayer.com. We are on target to be in around 1,000 stores by February in the UK alone.
MM: And currently this stuff only works on certain Nokia handsets?
BR: Yes. We wrote this initially for the Symbian 66 series range. So this product works on about half of all the handsets currently being sold in the UK. From January onwards, when we release the Microsoft OS version, we will be into PDAs, XDAs and iPaqs, and then the Motorola smartphones, so at that point, ROK Player will work with 70% of all handsets being sold in Britain.
MM: But always on an MMC memory card?
BR: No. It could be on an SD card or the Micro SD. The card is irrelevant. If you think of ROK Player as a piece of technology, like an engine is a piece of technology, you could put that engine into a bus, or a taxi or a racing car. The reason we have gone for MMC initially is to do with market reach. What I wanted to avoid was four versions of one title instore, one on an SD card, one on the MicroSD, one on MMC, one on MicroMMC. That would be a nightmare.
MM: But are you saying you might end up with that situation at some point?
BR: I dont think so. I think there will be convergence in terms of memory cards to probably only two or three types, but whatever happens, we will just wait and se, because ROK Player, as the engine, can sit in any vehicle that we want it to sit in.
MM: So how big do you think the market for this will be?
BR: Well, if you take Britain alone, every man, woman and child buys three-and-a-half CDs or DVDs a year on average. Generally speaking, the early adopters of smartphones buy more than that. In fact, considerably more than that - around 5-6 purchases a year. So we know they consume entertainment. We also know that they consume entertainment for their mobile phone. The trick now is to converge their desire for mobile entertainment into a device they already own the phone. So you dont need the Video iPod, and you dont need a portable DVD player, you just need your phone.
I always think we need to be looking three years out at any one time. So that takes us to 2008. By then, there will be something in the order of 40 - 45 million ROK player-compatible phones in the UK. Our view is that if just 1 in 10 of the owners of those phones buys just one ROK Player chip a year, it will be a sizeable industry.
And thats just Britain. This is eminently scaleable, region to region. ROK has a big company in Beijing, we are launching in N America, we have joint ventures in Brazil, Russia, Korea and Taiwan. So this is a global play, and each of the offices is regionalising their content to suit their markets. So how big is this is going to be? No one knows. Some market-making has got to go on, we are conscious of that. We have a very close working relationship with many of the MNOs (Mobile Network Operators) globally and almost all the OEMs, and on many levels, many deals are being done.
MM: And how confident are you that people will want to consume a 2-hour movie on a phone?
BR: Well, this is where it gets interesting. The Shawshank Redemption is the worlds first full-length movie available for a mobile phone. You can buy it right now in any of the stores that stock it, or online. I licensed this partly as an experiment, but also to make the point that now you can watch a 2-hour film on your mobile, whenever and wherever you want, whether youre in a network coverage area or not.
"Its a great tool to educate people, but I didnt expect any sales, because whos going to watch a two-and-a-half hour movie on their (mobile) screen? Well amazingly, this is our third highest-selling title, and what we found when we looked into it is that its been bought by fans of the movie, who probably already have the collectors edition DVD. What thats taught us is that, in terms of films, we have to be very specific in terms of what we license. Its really cult films. Things like Team America would be superb, because its very irreverent, its all close up action, high colour, high definition, and its just one joke after another, so you can graze. Something like that would be a volume film sale, whereas Shawshank Redemption is more for fans of that film.
MM: 17.99 is more than the cost of most DVDs. Could you get the retail price down by including advertising on the chips?
BR: We could do that, but at the moment we are keeping this as a premium product. We do have plans to reduce the cost of the finished product, and I think the key to volume sales is to put, say, half an hour of music videos, or half an hour of comedy classic clips condensed on to a 64MB chip, but to leave 40MB available space and then to retail that, complete with the pre-recorded content, for less than a blank 32MB chip.
MM: Any what about making the chips available for hire like a DVD?
BR: We will be doing an exact replica of an online DVD club model in the second half of 2006. For a flat fee a month, you will get as many of these as you want.
MM: And is it all about TV and movie content?
BR: No. We also have two other pieces of technology that we are introducing in January and March. First is our jukebox, so on every chip we sell, there will be other applications bundled around the content that you have bought, like ringtones, wallpapers, logos, whatever. These are on the chip, so you can sample them, and if you like them, you can buy them there and then, reverse billed, and they will upload from the chip on to your phone. So you can try it, see and hear the quality, and know what it will cost you. You can even take the chip out and pass it to your mates, and they can sample the same stuff and buy what they want.
The second application is what we call the Unlock Code. So you could have the original Star Wars trilogy on a 500MB chip, and you buy the chip with access to film number one, and then through reverse billing you open up film number 2 and film number 3. That offers all sorts of good opportunities for content owners, and for the MNOs, because on the face of it, this is not an MNO play, there is no airtime involved. But if you are giving people an opportunity to sample and buy stuff via reverse bill, or unlock a new series, then it is a revenue play for an MNO. At the moment, MNOs are not keen on this, but they are keen on the ongoing revenue potential that it represents.
We also have another very clever piece of kit in development. Its an instore download kit, which will contain all the licensed content that we have. So you have bought your phone, it comes with a blank chip, you take it to the store, put it in, select what you want to buy, swipe your card, and the content is squirted straight on to the chip. What is really appealing to the phone shops is that it should then drive the customer back into the store to delete what he has watched 10 times and buy something else, or if he wants to keep the content, maybe he will come back to buy another blank chip.
MM: And in terms of movies and other content, what comes next?
BR: I cant tell you the titles at this stage, but we are licensing a tranche of movies from Paramount, which will be about 12 films over the next year. In terms of sales, music video albums outsell everything else, and we have licensed everybody from Stereophonics through to Bloc Party. We have Sony BMG on board, and we have some fantastic music video albums coming through.
MM: Clearly, you have at least some content owners onside now. But when you first started talking the film companies, what was the reaction? Did they think you were mad?
BR: They were fascinated, excited, perhaps a little scared. Weve had to learn about the licensing, because we have turned the market on its head. We dont pay advances, which upsets the content owners. But because we have created and invented a massive market to monetize back catalogues, apart from anything else, in a way which is incredibly innovative, I dont feel we should have to pay significant advances.
The one thing that every major content owner, studio, TV production house and record label is very concerned about is the DRM, until they test and approve it. In fact, I had a little bet with one content owner. I sent him a chip containing some content and he sent me one of his secure DVDs and the idea was to see which one of us could rip and strip the others content first. We ripped and striped his DVD in 37 minutes flat, and posted it to an FTP site for him to view. Three weeks later, they still hadnt cracked ROKs DRM.
MM: But they would have eventually, surely?
BR: Oh yes. If youve got enough tecchie power, computer power and patience, it is possible to crack it, but why bother when its easier to rip a DVD? Similarly, why would you pay 17 to rip a product when you could buy it for 10 or 12 and rip it more easily? Thirdly, even if you do rip this and post it up on your computer screen, because of the difference in the pixel count on the mobile screen as against your computer screen, this comes out slightly pixellated on your computer screen, therefore quality wise, it is very difficult to resell. So the only way it can be resold is to recompress it back on to a memory card, which means the pirate has got to buy memory cards cheaper than we do.
MM: So what next for ROK?
BR: Well we have all the new titles coming out, plus the great content we already have, like Red Dwarf, Doctor Who, The Office, Little Britain, League of Gentlemen. What I would like to see now are some of the really cool handsets that the handset makers are working on. There are some great designs coming out, and I think if youve got the content right, coupled with the technology and the cool handset, its game, set and match.
Well have part 2 of the interview, looking at ROK TV, in a few days time.
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