How can IPTV truly compete on content?
This month’s column continues the content discussion that I began in my previous entry.
Two of the TV industry’s most important conferences took place in April: the annual conferences of the National Cable Television Association (NCTA) and the National Association of Broadcasters (NAB). It’s interesting to see how the traditional TV industry and the telco world view one another, and what each of them think will help them retain (or gain) the competitive edge.
First of all, rest assured that the telcos are finally on the cable industry’s radar screen. Whereas the cable industry’s take on telcos in 2004 was, “Yeah, they tried VOD in the ‘90s and have taken a few runs at TV, but I’m skeptical,” this year’s answer was, “Yeah, they seem to be pretty serious this time” and “Our traditional headend and software suppliers now have telco products, so I better start paying attention.” And if you want confirmation from more objective sources, simply read the analyses that have been coming out the major investment houses since about the fourth quarter of 2004. The majority of them (with a few notable exceptions) are touting the telcos’ TV intentions and publishing aggressive subscriber growth forecasts for the next five years and beyond.
By far, the biggest question being asked at these conferences was, “How will you differentiate yourselves from (your competitor)?” The cable experts’ verbalized answer was usually something like, “Our edge against telcos will be interactivity and unique content”--with the unspoken corollary of “Also, because our corporate parent owns the content.” The telcos’ verbalized answer is that they will meet cable and satellite’s content antes and raise them on bundles, customer service and bandwidth. But they’re all a bit inscrutable, like the Sphinx. They say it’s because the whole industry (cable and telco) seems to be watching and that nobody wants to set incorrect expectations. What they don’t say is that they don’t really know.
It’s not difficult to understand their perspectives. With the evolution of IPTV content protection technologies, the content owners are becoming more comfortable with the telcos’ ability to protect their intellectual property from theft or worse. But they are a bit conflicted about what to give the telcos access to. On one hand, they are always looking for new ways to monetize their content: new distribution channels, new ways to present it on hitherto-unexploited consumer service platforms. This sentiment was noted by several of the major cable TV programmers I met at the NCTA show. On the other hand, they don’t really want to give the telcos any degree of parity (let alone an advantage) versus the content they provide to cable and Internet properties owned by their corporate parents. Accordingly, some of the programming from the NCTC (National Cable Television Cooperative) is off limits to telcos.
Meanwhile, the telcos (at least the RBOCs) seem almost to be echoing the old Bell System mantra of, “We’re the telephone company, your trusted provider”--and are assuming their customers will bail from cable or satellite in their favor. The “said” thing was that customers would clamor for the telcos’ TV service by virtue of competitive bundling and pricing.
When asking a top telco’s IPTV executives whether and how they plan to differentiate themselves on content or interactivity, the answer is simply “yes.” What about locally produced content? “Yes.” Then, they would seek deflect the conversation into a discussion about their fiber network. But, after all, regulatory rules force the cable and satellite carriers to allocate capacity for local, public, educational and government programming, and the telcos will be held to these standards as well (irrespective of the telcos’ desire for a “light regulatory touch”). So the telcos will certainly carry the local network affiliates and local TV stations, just as their competitors do. But again, the question: “What about truly differentiating content?” That question still goes unanswered by major telcos.
A strong case can be made that locally created, locally produced content will give the telcos a competitive edge, for multiple reasons. And I believe that truly local programming--that which is created and produced by members of the local community; not just by the local affiliates of the corporate broadcasters--will be a major contributor to the telcos’ success.
Let’s take a closer look:
- People have a natural craving for information that pertains directly to them and to the real people around them
- In a study I conducted earlier this year, fully one fourth of the independent telcos surveyed were either already producing local programming or had made a decision to begin doing so once their TV services were deployed. Their customers are hungry for it. Programming will include local school sporting events, community government meetings and local merchandizing. There’s also a desire for hyper-localized programming, such as weather for farmers in rural agricultural areas. One carrier has even deployed weather sensors in its community
- Many communities have a vibrant arts community full of creative artists, storytellers, designers and videographers that have something to say and the skills to say it. Some communities that have funded local media centers have been very successful. Look at the Grand Rapids (Michigan) Community Media Center (http://www.grcmc.org), which has leading-edge studios, production facilities and its own van that goes out into the community to collect programming and even its own theatre. GRCMC loans video cameras and laptop computers to local residents to create programming that it will then carry on TV. Where does its funding come from? The franchise agreement with the local cable carrier requires a small percentage of the cable operator’s revenue be allocated to the GRCMC. Why can’t telcos respond in kind, by proactively offering a similar arrangement, as a community service? It’s not a big stretch for telcos, which promote themselves as pillars of the local community
- Community access television is being squeezed out by corporate media carriers (read: the cable companies), to the frustration of the creators, producers and viewers alike. Look at the cable franchise battles playing out in communities across the U.S., in major cities like San Jose, Calif., and Seattle. The corporate cable operators argue that they are businesses and want the “highest and best use” of their TV channel real estate, making them increasingly less likely to carry community programming that doesn’t attract big advertising dollars. Telcos can offer a new channel of distribution for community-based TV
- Low-power FM and Web-cast radio is the next form of blogging from members
of local communities. The telcos can provide an avenue for its
distribution--through their TV services and/or as ISPs
Pursuing any of these alternatives provide ways to compete with the local cable incumbent. Not to mention the satellite carriers, which are even more space-constrained and less likely to carry such local programming.
These are good reasons why telcos should go beyond the conventional programming available from the NCTC. If telcos can pride themselves on building 200-channel video headends, they can certainly designate some of them for local programming.
In the end analysis, there’s no question that the telcos have a golden opportunity to provide local content, have the technologies at their disposal to package and present it in a compelling way to their TV subscribers--and have a mandate from their subscribers to do so. And now is the best time for telcos to put local programming into their plans: at a time when it is so important for them to prove why they are different.
As I said in my previous column, it would be such a disappointment for the telcos to take the seemingly safe road to “me-too” TV--and now there are even fewer excuses for telcos to set the bar so low!
Steve Hawley is principal consulting analyst of Advanced Media Strategies. He may be reached via his Web site, www.tvstrategies.com.
Want to use this article? Click here for options!
© 2014 Penton Media Inc.
In this Webinar you will learn how to create a real-time relationship with your customers, how to proactively improve the customer experience, and how to successfully target and cross-sell services to boost incremental revenue.
- Megabytes to Megabucks, Bandwidth to Business Models: How 4G Is Changing Everything
- How to Unplug Your Redundant Telco Apps To Save Money and Improve Efficiency
- When IaaS Isn't Enough: Service Provider Business Models to Drive Growth and Build Margin
- How to Transform Your Aging Telco Voice Network to Drive New Profits and Revenue
- Creative Licensing Approaches for Telcos & Their Network Equipment Vendors
- Smart Home Opportunity: Balancing Customer Data & Privacy
This paper discusses the rise of Diameter and benefits of Diameter Protocol.
- Conducting The Orchestration – Order Management at the Speed of Business
- Toward a Converged Network Edge
- Beyond Spam – Email Security in the Age of Blended Threats
- 6 Important Steps to Evaluating a Web Filtering Solution
- The Expertise to Protect You from Botnet and DDoS Attacks
- Seeing is Believing – Bridging the Order Visibility Gap
Service providers are under tremendous pressure to turn up new services faster then before and, at the same time,
to do it at less expense - and intra-office fiber is one of the biggest challenges in terms of both cost and service
From the Blog
Join the Discussion
Get more out of Connected Planet by visiting our related resources below:
Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.Subscribe Now