In a smartphone world, content licensing remains murky

What's old is new again, it seems, even in mobile content.

Veterans of the space may remember the drawn-out hand-wringing over legally licensed ringtones (back when ringtones were still considered a huge business). The issue centered on third-party providers selling ringtones without approval from the music studios that owned the content. Indeed, disagreements over the practice continue to this day.

Well, it seems the issue has sprung up anew, though disguised in the garb of today's app store frenzy.

But let's start at the beginning: On testing Verizon Wireless' HTC-built Droid Incredible, I took a stroll through Google's Android Market and was surprised to find what seemed like endless "soundboard" applications. Android users can get soundboard applications for all kinds of popular people and characters, from Arnold Schwarzenegger to Homer Simpson. Once downloaded, these apps provide a list of pithy quotes (Arnold deadpanning "I'll be back," for example), and you can listen to them over and over again by pressing the appropriate button. Great fun.

Virtually all of these apps are free to the user, and of the ones I tried all served ads through AdMob.

What I found surprising was that virtually all of these apps were offered by what appeared to be small outfits or individual developers. I know from covering the mobile content space that acquiring the rights to distribute this kind of copyrighted content is difficult and expensive, and I wondered whether and how such licensing deals had been struck.

In order to focus my search, I selected only the soundboard applications for Gov. Schwarzenegger--I found around half a dozen of them, each offering virtually the same quotes. I contacted the developer of each of the applications to ask if they had the rights to reproduce the audio clips contained in their applications--and, if so, how much it cost them.

It should probably come as no surprise that none of them responded to me.

Covering my bases, I also pinged Google about the situation. "In registering to put their apps in Android Market, developers agree to the content policy you can find here," said a Google spokesman. "As you can see, it includes a prohibition of any ‘violations of intellectual property rights, including patent, copyright (see Google's DMCA Policy), trademark, trade secret, or other proprietary right of any party.' We respond to complaints regarding violation of this prohibition according to our general DMCA Policy, which you can find here."

This sounds a lot like the approach Google takes with its YouTube site--which, coincidentally, also offers this awesome collection of Arnold quotes.

Still curious about exactly how much it would cost an independent developer to legally offer such applications, I asked around at some of the bigger, established and likely reputable mobile content vendors. None agreed to respond. Finally, I found one veteran mobile content executive who has negotiated with a major movie studio for the rights to offer video clips from that studio's popular movies. The executive, who asked to remain anonymous, said the studio offered 1,000 movie clips for $100,000 per year. The studio refused to ease its stance, and rejected offers of a revenue share in lieu of an upfront payment. Needless to say, the deal fell apart; $100,000 is a huge amount of money in mobile content, even today.

Now, to be fair, I can't say for sure whether the "soundboard" applications in the Android Market are illegal, and my attempts to find out proved fruitless. (I also ran my questions past several movie studio executives who did not respond.)

Further, the situation is not limited to the Android Market; I did find similar offerings in Palm's webOS App Catalog and Apple's App Store. Though, interestingly, of the handful I found for the iPhone, one was offered directly by a major movie studio and another appeared to offer audio clips that sort of sounded right but were not actually taken from the source movie--thus possibly sidestepping copyright concerns (a trick that has been used before).

(One final side note: I can't directly link to any of the soundboard applications in Google's Android Market because, as the company notes on its Market homepage, "for a comprehensive, up-to-date list of the thousands of titles that are available, you will need to view Android Market on a handset." I find this a strange position, considering Google's stated mission is to "organize the world's information and make it universally accessible and useful.")

So, what does all this mean? I think it simply highlights the still-nascent nature of the mobile content space--even in this new smartphone, app store world--and the Wild West goings-on therein. --Mike