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At the End of the Day, Content Still Matters Most
10 Sep, 2008
It’s cliché, but oh so true – content is king. Look at most industry conference agendas these days, whether they be broadband or wireless focused, and content is the center of attention. The tag line for this year’s IBC Conference, a leading global telecom industry event taking place next week in Amsterdam, is “the world of content creation management delivery.” Most of the CTIA I.T. and Entertainment conference centers on the delivery of content wirelessly. Like it or hate it, the future of our business involves figuring out how to profitably deliver content to customers. Voice service won’t disappear, but will morph into a value added application among a variety of more robust services. Carriers are in the beginning stages of making the transition to purveyors of content. There’s a lot to learn. With that in mind, we invite you to join us for an upcoming free webcast, IPTV Content: Putting the Pieces in Place, scheduled for Thursday September 11, 2008 at 2:00p ET/1:00p CT. It will be well worth your time.
NCTC Eyeing Telcos?
08 Sep, 2008
I got word last week that the National Cable Television Cooperative (NCTC) may be relaxing some of its membership rules to allow IPTV providers to join. NCTC is one of the original aggregators of video content. Small cable companies formed NCTC to pool subscriber counts and get access to programming at rates that they could not get on their own. NCTC’s legacy has historically been tied to small cable companies. In the past ten years, small telephone companies wanted in on the video action as well and began joining NCTC to get access to cheaper programming. But those same telcos also competed with NCTC’s historical membership. The scuttlebutt is that the competitive threat posed by telcos caused NCTC to institute a new member moratorium in 2005. That moratorium created an opening for more telco focused content aggregators including NRTC and Telechannel.
Word now is NCTC is revisiting the moratorium. Telephony Online asked my opinion of this development, for which I commented that I wouldn’t be surprised if they allowed IPTV providers into the membership. NCTC, like any organization, needs sustainable growth, and telcos represent that growth. This issue is far from resolved and NCTC is being very vague about exactly what their new membership rules will be. I suspect that many NCTC members wouldn’t be keen on relaxing the moratorium, which creates somewhat of a conundrum for the organization itself. Keep existing members happy with the status quo, or think long term and open your doors to a growing market segment. Makes for some interesting board meetings I’m sure.
There are two events we’re involved with that are squarely focused on these and other telcoTV and IPTV issues. First is the TelcoTV Conference and Expo, coming up in November in Anaheim. TelcoTV is the premier event for the discussion of issues like this, and offers the largest solely focused exhibition of telcoTV solution providers of any conference in North America. Second, is a webcast we’re hosting on Thursday Sept. 11th, IPTV Content: Putting the Pieces in Place, sponsored by Avail Media. We’ll be discussing the importance of IPTV content and clarifying the different content rights issues. We’ll also have representatives from ESPN and Wealth TV to share their views on these important issues. I hope you can join us for both.
Sprint Goes Hollywood With Own Mobile Content
16 Oct, 2007
Sprint has announced the launch of Sprint Exclusive Entertainment (SEE), its own network of originally produced content for Sprint mobile phones. SEE, which will initially focus on sports, music, and other entertainment focused programming, will offer brief on-demand programs averaging two minutes in length. Sprint produces the content themselves and expects to deliver up to 150 programs each week. SEE illustrates the continuing trend of service providers producing content for both mobile and landline video networks.
Telecom carriers from the largest to the smallest are experimenting with content production and distribution as a way to offer differentiation from competitors. Distribution of this content is happening across multiple platforms, including VOD, PC, and mobile. As carriers gain more experience in content production, the sophistication and production quality will certainly increase. It’s too early to tell if these moves build significant competitive advantage. There is a contrarian view within telecom spaces that argue content production should be left to those who do it for a living and know it well. These skeptics argue that telecom carriers should stick to what they know and focus on becoming a distributor of content, not a producer. Respectable arguments can be made on both sides of this equation. For the time being, it appears as if the march towards content production will continue by telecom carriers. Time will tell whether this strategy adds any real value to both consumers and company stakeholders.
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Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?

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