I remember when content was king - Mobile World Live

I remember when content was king

21 MAY 2014

NEW BLOG: AT&T this week announced its proposed $48.5 billion acquisition of DirecTV, the US satellite TV provider, while Telefonica has had a bid accepted in Spain for a controlling stake in Digital Plus, the country’s leading pay TV operator.

Have operators rediscovered their passion for owning media companies? The last time they expressed such enthusiasm was the late nineties. Perhaps sufficient time has elapsed for them to forget that owning content was not always a happy experience.

A familiar refrain at the time was that ‘Content is King’ and sometimes the operators gave the impression of being the ‘less cool’ relation, hanging around with their sharper media cousins.

An instance of how television is an unfamiliar world for operators was the regulatory filing earlier this week that revealed AT&T can pull out of the DirecTV purchase if the TV provider does not renew a deal in the US with the National Football League to screen the popular NFL Sunday Ticket show.

But it’s understandable why operators feel the need to secure exclusive content. AT&T wants to match cable television rivals such as Comcast, as well as filling its 4G network with DirecTV content, so providing a competitive edge against rivals in the mobile market.

AT&T, which is committed to a quadplay strategy, already has 5.7 million TV customers through its fixed U-verse service while DirecTV has 20.3 million subscribers.

And daunting as owning a media firm might be, not exerting control over content can be equally as scary because someone else can take it away.

Eighteen months ago, BT surprisingly secured the exclusive live rights to show the Champions League in the UK from 2015/16. It has plans for its own 4G service, which is part of a fully-fledged quadplay strategy.

Currently the rights are held by BSkyB, with whom Vodafone has a distribution deal. Sky Sports is, along with Spotify, central to Vodafone’s pitch to 4G subscribers.

The operator had statistics at its results meeting this week that showed bundling music and sports content into a 4G tariff boosts usage more than twofold over 3G.

When access to content is under threat, an operator has a number of options, ranging from securing the rights themselves to buying the company that currently holds them.

During a Q&A session following Vodafone’s full-year results announcement, CEO Vittorio Colao acknowledged the complexity of media ownership for operators by saying: “There is no uniform answer. It really depends market-by-market.”

Mobile World Live followed up with Colao after the session and he said there was a greater need for content in a quadplay strategy where a fixed network also needed to be filled. Buying a content provider simply to fill a 4G mobile network would not be sufficient justification, he said.

Quadplay is integral to Vodafone’s strategy, particularly in Europe. The operator has put down some big bets over the past year with its expensively assembled cable television assets. It has agreed to pay €7.2 billion for Spain’s Ono, and €7.7 billion for Kabel Deutschland. And deals in other countries have been mooted. The question now is how Vodafone and other operators plan to keep those networks filled.

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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