Telcos gain traction in TV, lured by advertising

Written by on November 17, 2015 in Opinion with 0 Comments

ImprimirRather quietly, it seems that telecoms is becoming a major player in the TV arena. And, of course, with this moves comes the opportunities of huge revenue streams from advertising. According to Ovum, telecoms operators have grabbed 19 percent of the market, at 177 million subscriptions at the end of this year – presumably this is an estimate. Although there is some growth through mergers and acquisition, the report’s author Jonathan Doran believes that “while the flurry of M&A activity has boosted numbers of Telco TV connections over cable and satellite, IPTV is also still growing.” There are now many hybrid ways of transmitting TV and this is both fragmenting the market, creating opportunities and putting up barriers.

The most talked about deal in recent months has been the AT&T purchase of DirecTV. The goal is revenue through advertising. AT&T is already experimenting with a multi-screen approach. Having partnered with Opera Mediaworks – a company that can engage more than 285 million mobile subscribers from the major US carriers, AT&T believes it is ready for prime time. According to Mike Welch, head of the initiative at AT&T, “we’re now able to tie a specific target household on TV with the mobile devices associated with that same target household.”

Oh Oh.

Once again we are witnessing large telecoms companies believing that they can target individuals – and households – with relevant advertising. In fact, targeting households is probably more difficult than targeting individuals. In a household you have, potentially, four or five individuals with completely different tastes and desires, from sport, to recipes, war games to fashion accessories. At least three of those four are not going to want the other adverts.

IMG_0809Mind you, there may be hope. If you find yourself scrolling down your timeline on Facebook, you can select ‘not to see more of this,’ and ‘do not show me stuff from Acme shoes.’ Perhaps as telecoms companies get further traction in the advertising arena this kind of functionality will be available in the multi-screen world of the new TV. That would be great. Except of course, AT&T and others need to factor in the fact that most people either watch TV on a catch up service in order to avoid adverts. Or they download ad blocking software.

Let us hope that the brands that are trialling this with AT&T, and the advertising industry, have factored in that they are throwing up huge barriers for themselves, through programmatic advertising and misplaced confidence in their ability to tell stories compelling enough to keep viewers watching the adverts.

Advertising, and the apparently huge revenues that spring from it are a diminishing vision, unless they are cleverer than we think they are.

Advertisers, brands and others need to do something insanely great.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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