As telcos grapple to generate profits from their lackluster traditional and new offerings, video content has reportedly caught their eye. With its revenue-generating appeal, video content is viewed as a tremendous opportunity to gain profits in this ever-changing market.
Based on “Video as a Core Service for Telcos” 2018 report released by IHS Markit, last year, the 50 telcos video service providers gained approximately $89.3 billion, an eight percent surge from $82.7 billion in 2016.
In addition, these firms have garnered over 300 million video subscriptions. The Economist Intelligence Unit forecasted that, for this year, the aggregate telcos revenue in the 60 largest international markets would reach $1.2 trillion.
There are three primary approaches to effectively benefit from the video content opportunity.
First, telcos can concentrate on making content themselves.
This can be done through their own production offices. They can also offer video content from mainstream video-on-demand companies like Amazon and Netflix, or directly get content from producers.
For example, Spain’s leading telco firm, Movistar, acquire quality content from third parties. Domingo Corral, the Head of Original Content at Movistar +, noted that they also produce their own content and strive to make their offerings unique, exclusive, and more compelling.
Corral stressed today’s need to be different and to invest in original content. The Movistar + originals are highest-rated programs, which is a testament to the success of this strategy.
Second, telcos should develop new relationships, skills, and techniques. They should not just connect to the consumers in their segment, but instead, get out of their comfort zone.
Media and telcos analyst, Paolo Pescatore, noted the UK’s BT introduced BT Sport that facilitated the rise in subscriptions. Moreover, France’s Orange established OCS (formerly Orange Cinéma Séries) to make original content available.
Finally, telcos can be content aggregators. This shall enable them to compete or partner with streaming giants. For example, BT has sealed a first-of-its-kind agreement with Amazon, making the latter’s Prime Video application available through BT’s TV set-top boxes.
Telefónica and Netflix started their international collaboration this year, integrating the video streaming giant’s offerings in Telefónica’s video and TV platforms in Latin America and Europe.
In addition, with media and content companies all introducing their own streaming services and the rise in video for mobile and online services, telcos can become content owners. They can also sell their traditional services to streaming companies and content owners.
With telcos joining the video content bandwagon in this era of “innovate or die,” integrating themselves in the video streaming industry can help them respond to modern consumers’ demands and to survive in the long run.