Why Telcos should move into entertainment

As their networks transform into IP and threatened by Internet players, many Telcos are hesitant whether to enter the Entertainment business. Here are three main reasons why Telcos must go for it.

New revenue streams:

Telcos are very profitable today and generate a huge amount of cash worth to be invested in accessing new markets, as Entertainment, rather than just upgrading their networks for higher speed Internet Access.

There are different business models to monetize Telcos huge content audience: Subscription, Pay-per-click and Advertisement

Extending into the content delivery value chain can put Telcos in a central role to use their network capabilities to give users access to the long tail of niche content. Operators must profit from their customer knowledge and offer personalized content and promotions, as well as target relevant ads.

Managed end-user devices :

Telcos are trusted by end-users, and are in a privileged position to manage the complexity of Home Networks, and provide mainstream end-users with simple, easy-to-use services .

Mobile operators are also in a better position to provide premium content to personalize devices (wall-papers, ring-tones, apps..), as well as advanced Multimedia Services based on Rich Media Client software that are tested and pre-installed in handsets, for which they can provide special data rate plans

As mobile broadcast technologies are available, UMTS operators can re-use their spectrum, sites, and antennas to deliver broadcast TV over DVB-SH. Mobile TV hybrid services (both broadcast for live channels and unicast for VoD), bundled with IPTV make a proposition that Internet players are unable to match.

Differentiation:

Exclusive content agreements are a powerful way to reduce churn and attract specific customer segments. Only Telcos that are in the entertainment business will be able to use this powerful differentiation by exclusive content.

Global players, as Telefonica, Vodafone or Orange, can capitalize on the group size to get better access to global content. Since content rights are negotiated country by country, the Telcos, with in-country presence are better postioned to negotiate than global Internet players.

Distributing content is a way for Telcos to avoid being commoditized into bit streams.  Telcos must learn to make their own networks a strong asset to compete other players.

3 thoughts on “Why Telcos should move into entertainment

  1. Tomás

    Maybe this post is “out of scope”, but I found it interesting.
    The guys of Stage6 are closing.
    http://www.stage6.com/

    They provide a service that offer true high quality video experience online, with divx.

    It seems they didn’t find a buyer for its service/platform. Not even a Telco…

    You can watch them till 28th February.

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