Telcos can keep ahead by offering a better content experience

Instead of watching linear television, more and more people watch catch-up TV or on-demand video content. They increasingly do that on mobile devices. This offers possibilities to telecom providers who aim to take advantage of the changing media landscape.

More content, more channels and more on-demand platforms create the possibility for telecom providers to differentiate through the content experience they offer. In addition, telecom providers need to decide about which role they want to have in the distribution of video content.

Vast potential market for video content

This is what PwC’s media experts Steven Pattheeuws and Vikram Dhaliwal write in their article Video killed the radio star... but it won't kill TV. Pattheeuws: “The potential viewer public of video content is enormous, but in the current globalised world the question is which model will generate the most revenue for smaller national telcos for instance.”

Three ways of playing the game

Pattheeuws and Dhaliwal describe three models telecom companies can consider for their video content offering:

  • In the HBO model, a market party offers a large database of quality content and generates revenue by selling subscriptions to as many customers in the market as possible, regardless of the provider they are with. In this model, good content that is constantly renewed is essential to engage customers. Providers need a few blockbusters every year to stand out above the large content offer.
  • The MCN (Multi Carrier Network) model refers to OTT models that offer bundled-up content on platforms like YouTube. It is often professional content bundled up with content from YouTube stars. This business model is driven by advertising revenue that has to be shared with distribution platforms such as YouTube.
  • Lastly, there is the possibility to offer specific content, for instance an OTT sports channel, through a subscription model. Niche content for a small viewer public can also be offered this way. Businesses and organisations can directly offer their content through an OTT model they manage themselves, without involvement of telecom providers, broadcasters and OTT channels.

Wider customer base is essential

"For all these models a wide customer base is essential", says Dhaliwal. “Only this way can telecom providers write off the fixed costs of acquiring and distributing content across a sufficiently big customer base.” Pattheeuws and Dhaliwal indicate that it is important for telecom providers, big and small, to bring together a wide variety of content from different sources and help consumers to navigate this content in a way that is relevant and offers the best user experience.

Recommendation engines

Pattheeuws: “More and more people consume content on demand. This content is increasingly fragmented over different distribution platforms. For instance, season one of a popular series can be available on a different platform than season two. Telecom providers must invest in smart recommendation engines. These engines should function on all content platforms, ranging from Uitzending Gemist (Dutch catch-up TV portal, ed.) to Netflix or Amazon Prime. To make this happen, telecom providers should enter partnerships with content providers who allow them to include OTT content in their recommendation engine.”

Invest in customer analytics skills

“Further, they must heavily invest in customer analytics skills. One of the biggest challenges for linear TV and on-demand video via TV is being able to distinguish between, on the one hand, viewing behaviour of a household, and on the other hand the viewing behaviour of individual members of a family.”


Being ahead of the competition

“This way telecom companies can surpass the recommendation engines of, for instance, Netflix and YouTube”, says Dhaliwal. “And the matter is urgent, because otherwise the global OTT players, but also smart TV manufacturers, will fill this gap. By also adding a context and sentiment specific dimension (location, time, device and sentiment) to the recommendations, telecom operators can have a lead over market parties who are also working on such functionalities.”


Contact us

Steven Pattheeuws

Partner Strategy&, PwC Netherlands

Tel: +31 (0)88 792 29 36

Vikram Dhaliwal

Senior Associate Strategy&, PwC Netherlands

Tel: +31 887922874

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