His goal: cellphones as entertainment
Cellphone carriers Sprint and Nextel completed their merger in August and the combined company -- third-largest behind Verizon Wireless and Cingular -- has been quick to move into the entertainment business by offering games and music on its phones. Sprint Nextel chief operating officer Len Lauer recently spoke with reporter Keith Reed.
Q: Why is the company investing a tremendous amount of money in a new high-speed network to deliver entertainment content?
A: Our new network, which we're calling PowerVision, really enables the wireless device to be the third screen in the customer's life. We very much believe that with our network the bandwidth is there to deliver the same high-quality experience at the handset.
There are three things you need when you leave the house: your wallet, your keys, and your cellphone. You can now download full songs of music in MP3 digital quality, and for the gamers, we're going to have games in very high-quality resolution.
Q: Is the music going to be the application that drives entertainment on cellphones more than video?
A: Early on, music will drive entertainment, but I think the larger opportunity will be with video. If you take a look at consumers' expenditures for music vs. video today, the music industry is dwarfed by the video content industry.
We are at a point where you can have TV-like capabilities on your phone. Don't think of it as replacing your television, but as something that goes along with your lifestyle, so as you're away from your house, you can see a clip of the Patriots.
Q: What's preventing video from becoming bigger than music on wireless phones right now?
A: Digital rights management. Content providers obviously have been averse to people having their content. The music industry has been most innovative at working with digital rights management.
An example is the Sprint Music Store. When you download a song, not only do you get to replay that as long as you want on your handset, you can download it to your PC, you can send it to two additional PCs, you can burn as many CDs as you like. The broadcast and video content industry is a little behind the music side.
Q: Music downloads to a computer are normally 99 cents. To download to a Sprint phone costs $2.50. Why do you think people will pay that much?
A: When you download a song to an iPod, it can only go to the iPod. We're much more open in terms of how the customer wants to use it. The music industry needs to be compensated for that portability of the music. Secondly, it's mobile. You get it when you want it. The last time you were at a sporting event, why did you pay $5 for a bottle of water instead of waiting until you got home, where it's 50 cents for the water? The answer is, you wanted it now.
Q: You're also in a partnership with Comcast and a few other cable companies. Talk about that.
A: What it means to our consumers is a new array of services to really make their lifestyles a lot more fun and a lot more productive. We'll have capabilities that you can buy through your cable company and have one voicemail as opposed to one for your local service and one for your wireless service, to have e-mail access at your laptop, at the television, and at the cellphone, and also to extend capabilities so that if you're watching a show and you have to go pick up one of your kids and you're waiting for them in a parking lot, you can watch the last five or 10 minutes of that show.
Q: Will I be able to listen to the radio with my phone and punch a button to grab that song right out of the air?
A: That's what we'll attempt to deliver next year.
