Such is the pace of change in the broadcast and telecoms industries that barely a day goes by when any clear conclusion I’d reached on their dynamics gets thrown into the air once more. Though IBC wrapped-up nearly a month ago, it is for this reason that I have only now been able to apply fingers to keyboard.
For some time, I’d been harbouring headlines for this post that read something like “broadcast and telecoms no longer exist as discrete industries”, on the basis that both, ultimately, are striving to deliver some form of content over some form of network to their customers.
But IBC changed that. When I left Amsterdam, the headline had become “Telcos: watch out, broadcasters are going to eat your lunch”. The theory is that the new generation of IP broadcast service providers – who have oodles of content and millions of customer relationships – now conveniently piggyback the IP roads that telcos have invested billions in laying, beating them at their own game before they even get a chance to play. It’s a more appropriate headline, but still isn’t quite the full picture.
Where we have got to is this: mobile telecoms operators have been searching for the next big thing for some time, to augment declining voice and messaging revenues. As 3G and eventually 4G opened up big IP data pipes, it transpired that video services were extremely popular with their customers, with everyone largely agreeing that video and other rich content will eventually constitute about two thirds to three quarters of all network traffic. In ‘telco land’, the race for new, monetisable content partnerships was on.
But these new mobile IP networks also allowed a new breed of over-the-top application and service providers to step in and reach operator customers with rich messaging and content services, bypassing core networks entirely and eating into the revenue opportunity that operators had intended to capture from new rich content services. Operators are now struggling to make these networks as stable yet flexible as possible through virtualised, software-defined architectures, and searching for the ‘next, next big thing’ (which is the subject of a post for another time).
Meanwhile in broadcast, a similar thing is happening. New over-the-top ‘broadcasters’ – the likes of Netflix and Amazon Prime – are now using IP as the network delivery mechanism, going ‘over the top’ of traditional broadcasters who had also intended to use them to deliver their own on-demand and non-linear services. At the same time, relatively novel concepts like cloud-hosted content delivery networks and software-defined networks are also being adopted by the bigger broadcast service providers, just like they are in telecoms, to enhance their service agility. But there are two main differences between what is happening in broadcast and what is happening in telecoms.
First, in broadcast, both traditional and new broadcasters have content. Content is extremely valuable as the primary ‘commodity’ which consumers are now buying, as telcos learned too late to their detriment. Some IP-only broadcasters are going as far as commissioning and producing exclusive content for their networks. They are able to do this thanks to entrenched industry relationships built up over decades. Right now, telecoms providers can only dream of this depth of relationship, let alone enact them fast enough to get them onto their networks and start generating revenue from customers.
Second, and this is one major learning from IBC, not only are broadcasters using established (fixed) IP networks to deliver services, they’re now taking their content, service delivery and business models and their own supporting networks (CDNs and the like) into the mobile space. Much has been made of the ‘second screen’ phenomena, where consumers use their mobile or tablet device alongside their TV viewing to augment the experience with things like social media engagement or ‘gamification’. Thanks to the studious efforts of mobile telecoms firms, the network path is already well laid for broadcasters to take advantage of, for both second screen services and – well, why not – the broadcast content itself.
So, where does this leave telecoms providers? All looking a bit bleak, isn’t it? I have to say, I’m struggling to find some good news. Where it may lie though, for both industries, is that the relentless drive to virtualise networks will ultimately deliver a highly flexible, agile network through which a multitude of highly scaled and scalable services can be offered; even if it’s not the operators or broadcasters themselves that are the root providers of them.
The operators and broadcasters that will eventually win will be those that are able to make the right choices about which technologies, content or services to buy in or outsource, and which they choose to build and run themselves. Virtualisation therefore becomes a question not of network technology, but business transformation. And the concept of ‘over the top’ will cease to exist and just become ‘the service’.
Technology vendors and service providers that support the business transformation of their operator customers will have to fight even harder to get their voices heard. While there were some seriously impressive organisations at IBC this year, there were also a lot of “me too” organisations. You couldn’t move for ‘OTT video optimisation’ and ‘seamless customer experience’ marketing straplines, and every other combination of buzzwords you can think of.
The importance of carefully planned and strategic broadcast PR and telecoms PR campaigns will never have been more important. It is for this reason that we undertook our research which looks at the factors that influence the longlisting, shortlisting and purchasing process that broadcast service providers consider when choosing technology partners. Findings are available in our free whitepaper, which you can download at http://www.ccgrouppr.com/insights/audience-insight-report/successfully-marketing-and-selling-to-broadcast-service-providers/. Duncan McKean is head of broadcast and media technology at CCgroup.