We’re not 100% sure how to spell it, or whether it is actually a thing yet, but appealing to the fidgety younger consumer could be the key to cracking the content market
For many telcos, convergence is a business model which offers a shining light of profitability in the cut-throat digital economy. While connectivity providers should be viewed as the bedrock of the digital economy, capturing revenues has been an increasingly difficult task. The Silicon Valley internet giants have been securing the lions share, only allowing crumbs to fall down the value chain, relegating the telcos to the dreaded role of connectivity utility, though convergence offers a glimmer of hope.
Convergence allows to telcos to offer value. Whereas mobile and broadband offerings and the experience are purely defined by being able to connect to the internet in a timely, efficient and secure manner, content takes the telcos away from a commodity offering. Though a massive question still remains; how can the telcos penetrate this ecosystem in a profitable manner?
We do not believe owning content is a particularly sensible way to go about it. AT&T’s acquisition of Time Warner might have been one of the biggest stories over the last 18 months, but running a creative content business is completely different from the scientific and risk-adverse connectivity game. BT has already shown billions can be wasted for little reward, so where is the opportunity?
The aggregator business model is one which has proved successful in recent months, offering customers a single platform and billing service, but for the telco which can think a bit more creatively, the fidgety consumer offering opportunities.
Speaking at IBC 2018 in Amsterdam, Endemol Shine’s Chief Creative Officer Peter Salmon pointed towards the restless nature of younger demographics as one of the biggest complications for the content industry. These digitally native audiences are used to consuming media on multiple devices simultaneously, seeking content through a much broader range of channels than traditional industry can keep pace with.
For example, Love Island was one of the companies more successful titles in recent months, not only due to a refresh in the content, but because the target audience was engaged through Snapchat. This is a platform which is becoming incredibly popular with younger demographics, and while there longevity questions surrounding usage as the user gets older remaining, it allowed the company to provide a multi-platform experience for the user. Mobile is driving a substantial amount of content consumption nowadays, but to truly capitalise on the opportunity, new means of engagement have to be considered.
“Companies need to go where the consumer goes,” said Salmon.
Linear TV is one channel, on-demand is another, social media platforms are an excellent one as are apps to bring everything together. The industry is struggling to engage this audience, as well as adapt the relationship with the user to make it relevant for today’s trends. While this is a complication for the traditional industry, it offers an opportunity for the telcos to add value; the insight through mobile usage is already there.
Short-form content is another trend worth keeping an eye-on. These videos, typically 8-10 minutes long, are a new way to engage audiences. They have failed in the past, but with the current domination of mobile platforms and the penetration of social media, new opportunities have arisen. Salmon believes this format is set for a boom in its own right, but as a supporting player for traditional content through the alternative channels, its critical. This presents yet another complication for delivering content to the consumer.
The telcos are organizations which know how to manage these complicated relationships with customers, in theory, as they have been dealing with the multi-platform universe, which is becoming so prominent in content nowadays, for years. Connectivity is also crucially important in everything to do with content moving forward. Mobile is king in the digital economy, and telcos know all about delivering these experiences to the consumer, not necessarily owning the content. Multi-platform, mobile driven engagement is an area the telcos know about.
The “war for attention”, as Salmon describes it, is creating a huge headache for the content industry, though it does present the telcos an opportunity to gain entry to this much-desired aspect of the digital economy. Wherever there is disruption and complications, the door is open for new players.