Crossing the Content Divide: How industry view on content is changing Pierre Cloete

Why has BT (Britain’s biggest telecoms corporation) bought the English Premier League rights for £897millon and rights for the European Champions League for £1Billion? And why is Netflix (a pure Video-On-Demand Over-The-Top operator) producing House of Cards for an estimated US $ 10 million per episode?

None of these companies are pure broadcasters and these are just a few examples of the deals going on at the moment. The landscape is changing and content is entering a whole new game. One thing is clear, content is massively important. The explosion of connected mobile devices has opened a whole new world of possibilities when it comes to viewing TV and video content. In the TV arena, they are talking about the “Golden Era of TV” as the quality and volume of TV shows have never been at such a height and this mainly due to the demand for video content.

With the massive shift in content ownership and rights taking place, the mindset of telecoms corporations (telco’s) and Mobile Network Providers (MNO’s) are changing. Current business models for telcos and MNOs are skewed towards charging for connectivity, voice and data, whereas broadcasters rely on advertising and subscriptions as the backbone of their business. The broadcasters and content owners view content as an asset that is traded as a commodity. The objective is to “sell” the content directly to the end-user (in bulk or piece by piece) or have advertisers buy space in and around the content which funds the right to have viewers watch the content.

Telcos and MNOs have been viewing content as an expense to bring in more customers onto their service and charge for the data or connection. The usage of the bandwidth is being charged for at a mark-up which is funding the content. Providers serving content on the telco and MNO platform have been introducing advertising and Video-on-demand models to fund the content costs (i.e. YouTube and Netflix).

The new business models for delivering content will be hybrids, where the importance of monetizing the TV and Media content will take all potential revenue streams into consideration in the conception phase. This will ensure the full value of the content is unlocked. Here, telcos and MNOs have the advantage as they can own the complete value chain. The customer’s primary relationship is with their main service provider.

Telcos and MNOs already have extensive penetration regarding transactional relationships, they are a trusted provider and can use that to leverage additional services and products of which TV and media is one of the most important.

Ericsson TV and media is gearing up to assist its current and future clients to realize the potential revenue in content offering TV and media solutions relevant for each market and each platform.

(Pierre Cloete is Head of Practice, TV and Media, Ericsson sub-Saharan Africa. He is responsible for driving the engagement and sales of Ericsson’s TV and Media business in the region. Over the course of 15 years, prior to joining Ericsson, he held several positions at SuperSport and M-Net rising to the role of Director of M-Net Movies).