The pervasiveness of broadband and the revenues available from online advertising have improved the odds of actually making money from Internet content, especially compared with the way things were done back in the late 1990s and early 2000s. Panelists at iHollywood Forum’s VCDemo Digital Media Venture Summit Tuesday outlined a few of the opportunities and challenges in this area, and it is no surprise that they pointed to wireless content as the new frontier.

Nathan Smith, who manages Sprint Nextel Corp.’s application developer program, said the ability to easily bill cell-phone users for downloads (no one wants to enter a credit card number into a phone) and advanced handsets have opened up a new universe to startups hoping to develop wireless content. It’s a tricky investment area, but there are areas that are still underserved. Specialized content is one, including wireless content aimed at, say, hobbyists, particular religions and even female mobile gamers. “It has to be big enough for us to make the business case for us to put in on our portal, but there is a huge segmentation opportunity in mobile that isn’t being taken advantage of today,” explained Smith.

That’s not to say there aren’t challenges in picking investments in the Web content realm. One area in which investment opportunities are all but exhausted is online video, reported Trinity Ventures general partner Gus Tai. “If you want to be a destination site, in five years you’ll get as many new consumers as YouTube gets in a month,” he pointed out.

Web content production companies also are flooding the investment landscape, and they aren’t always smart investments, added Brent Weinstein, CEO of 60 Frames Entertainment Corp. “There’s an announcement every day about a company that is moving into this space,” he quipped. “How many have access to artists and advertisers?” Not surprisingly, Weinstein said 60 Frames doesn’t fit that mold. The newly minted startup functions as a new age talent agency that aims to connect artists, online advertisers and Internet publishers. Part of his pitch to Tudor Investment Corp. and the Pilot Group, which provided the startup with its recent $3.5 million Series A round, was the connections his company developed while being incubated within its former parent United Talent Agency, where Weinstein was head of digital media. —Olaf de Senerpont Domis

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Tags: Sprint, vc, venture+capital, web 2.0, wireless