In TV Land, Whose App Is It Anyway? Telecoms Companies Go OTT

Written by on July 24, 2013 in BillingViews, Opinion with 0 Comments

Whether a company – or industry – is friend or foe depends on your perspective. Telecoms companies spend much of their time worrying about OTT players. From WhatsApp to Facebook to Netflix, they are eroding revenues and causing heated debate. Ultimately this debate will go away. Meanwhile, watching the TV world, the battleground is Pay TV (and will be worth more than $400 billion by 2017, according to Infonetics). It is being ferociously fought over and telecoms companies are muscling in.

Whilst China Telecom has the most IPTV subscribers at just over 20 million, the fastest growing IPTV company is KPN, with growth of 77 percent in the last year. Meanwhile Brasil’s GVT grew 62 percent and Russia’s Rostelecom boasted a 42 percent jump. This according to Infonetics’ PAY TV subscriber database.

While the ‘traditional’ Pay TV players – the satellite and cable guys – fight off competition from telecoms companies and others, the whole landscape is shifting. The content companies know that the success of TV – or video – is in the content.

So, on one hand there is a battle for easily discoverable content – thus the rise of the centralized product catalogue. Thus, also the recent acknowledgement that smartphones and tablets are not the ‘second screen’ – but the first. Smartphones have browsers, which are designed to search. Smartphones have the ability to pay for content. And smartphone owners are customers of telecoms companies who are slowly understanding what those customers want, and when. Meanwhile, the arm of a sofa and a remote control are impossible as either a mouse or touchscreen. And with the advent of Apple’s ‘fling thing’ the big TV in the corner becomes the second screen.

“The big screen is the background screen,” agrees William Cooper, editor of the excellent interactive TV site, Informitv. More exciting or worrying depending on the viewpoint, the future of TV is quite possibly an app. There are many supporters of this view, including Netflix boss Reed Hastings, who advocates this (many times) in his well know Manifesto on the future of TV. Informitv’s partner in the States is also a promoter of this theory. On the face of it, it makes complete sense. It creates an easy journey for the customer, and allows providers to compete directly and personally for eyeballs. But look a little deeper and it is not so rosy. “If ‘app TV’ happens it will cause big problems,” according to Cooper. In a world where there are already too many segments, it will increase the problem dramatically. “If it does happen, there will need to be some sort of bridge across the apps, or segments,” says Cooper. Otherwise it will be chaos.

Whether or not we see an app TV world appear, it would seem that telecoms companies have a serious advantage. Now that Direct Operator Billing is a reality (more on this soon) and telcos are getting the hang of customer analytics, the one who has the best connection with the smartphone or tablet and its owner will be in a winning position. Easy search, easy pay and relevant offers are compelling propositions. And that does not even begin to delve into the adjacent, impulse driven, product placement purchase opportunities.

So, while telecoms companies whine about OTT players, spare a thought for the Pay TV guys who are watching telecoms companies go OTT in their own back yard.

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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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