Second Time Lucky? Vivendi Formally Introduces Mobile Portal Zaoza

French media and telecoms giant Vivendi (EPA: VIV) has commercially launched its previously announced entertainment portal Zaoza today, which offers unlimited downloads of content—including music, ringtones, video clips and games—for both mobiles and computers for a monthly subscription fee of 3 euros ($4.42). Vivendi has high hopes for the service, which will be rolled out to French consumers in March, hoping to sign on half a million users by the end of the year, adding to the 100,000 beta users they've already attracted. The next stop will be Germany in the summer, and the UK by the end of the year.

What makes this portal different? Vivendi, which reports it spent a little over 10 million euros ($14.71 million) on it, has hopped on the social networking bandwagon, and Zaoza will allow members to share the content they download with up to five friends. They're also offering exclusive content—such as mobile-only games and music from known artists--not just making it another distribution channel for existing products. They've managed to round up other heavy hitting content partners—including Sony (NYSE: SNE) BMG for music, and Eidos and THQ (NSDQ: THQI) in games. They expect to sign on other content partners, including Warner Music Group (NYSE: WMG) and, will eventually add games from recently acquired Activision (NSDQ: ATVI) and Blizzard. So far, they've got 850,000 pieces of content on the service.

" title="BusinessWeek">BusinessWeek, meanwhile, has a very thorough, in-depth feature looking at the venture's chances. It's no secret that Vivendi's not had the best of luck with its media and online ventures. Who can forget its 2000 purchase of Seagrams which saddled the company with eye-watering debt, or its original stab at a mobile-PC entertainment portal Vizzavi, which crashed and burned after Vivendi and Vodafone (NYSE: VOD) reportedly sunk a combined 1 billion euros ($1.48 billion) into the venture?

But that was nearly a decade ago and Vivendi has apparently learned a thing or two in that time. It does a better job at squeezing revenues from content, such as sticking to subscription-based models that allow it to hedge against illegal downloads. Analysts are apparently excited over the sharing aspect of Zaoza, which lets its members share videos, photos and music through their phones as well as their PC's. Some believe it could alter the revenue mix for mobile operators by upping the money it makes from messaging, and easing its reliance on voice calls.

They've also thought hard how to make the sharing work. Friends have to sign on to get the shared content, and while they may enjoy the content themselves, they are not allowed to pass it on to their friends without permission from the rights holder. They can go and buy the content themselves to share it with their friends, but as the catalogue of content is refreshed hourly, it may have already disappeared. Plus, once the content is downloaded it belongs to the member, no matter if they change their handset, operator, or even quit the Zaoza service.

The one challenge will be signing on operators, though aside from Vivendi's SFR, it has already signed on rivals Orange and Bouygues in France.

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