Networking

Advice to an SP

He sums it up like this: “Content is important for people and people are important for service providers. Content excites people.”

The issue that many services providers have, of course, is that creating content takes deep pockets. Not everyone can be an AT&T, but any service provider can be a content aggregator.

One solution is to liase with local content providers and provide services to subscribers. “Shifting delivery from, say, satelitte TV to multi-screen delivery to individual users is not difficult and allows you to build a subscription model. What I'd suggest is then use a version of the Amazon model to drive extra revenue: 'You liked this so we think you'll like this.'”

Another route is to combine different layers and types of content. “On top of satellite TV, you can add on on-line shopping, e-goods and e-services, as well as apps and games.” The issue here, he explains, is that “it's all about being the first mover”. Faced with a multitude of content choices, how should a service provider make the right choices? “It's always easier to go with something mass – football, F1 and so on. The trick then is driving the ad revenue which, as a rough industry standard, stands at around $6 per hour per customer. The trouble is that nobody yet has found a way of generating revenues at that level for on-demand services, despite the sense of using those as a way of differentiating yourself in the market.”

Using his native Belgium as an example, he talks of how the twin language groups (Walloon and Flemish) create a natural split in the content market. “We can also see in many other territories the opportunity to drill down into smaller cultural or interest groups, but the danger comes with a shift to a Balkanisation of content at the same time as the service provider has a wider geographic focus.”

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