This report begins with a look at how the ecosystem is evolving for industry players, then delivers an inventory of telcos’ objectives for and approaches to convergence, along with an analysis of 10 players’ convergence strategies, then concludes with a description of the main options available over the long term.
Why this convergence?
The ultimate goal of telecoms-media convergence is to suss out value wherever it can be found, be it in access, monetising the network or diversifying into media services. Plus it is increasingly hard for telcos to ignore the opportunity to monetise transaction or ad-funded media services.
What impact on the operators’ strategy?
The local situation will naturally influence operators’ strategies: degree of competition, adoption rate for superfast access and pay-TV products. But the world of OTT is coming to blur old lines and market conditions, and is the biggest source of disruption.
The objectives assigned to a convergence strategy need to be defined ahead of time. They will determine the stratagem (degree of verticalisation) an operator employs. Here we find a broad spectrum between major content strategies and more opportunistic or partner-based approaches.
What opportunities for the future?
Traditional TV distribution will not last forever, stuck as it is between the increasing trend of cord cutting and rising content costs. More flexible partnership and multi-service platform strategies are the way forward. And streaming will eventually be the key growth driver for B2C offerings.
Market players need to anticipate future video market transformation, and the process will be a long one. Operators must rise to the innovation challenge, and offer personalisation and targeted advertising solutions, or risk being cut out of the loop by Internet giants.
To delve deeper into this theme, check out our last report
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Content at the heart of it all: Is a merger with telecoms inexorable?
In a TV market in the throes of an historic transformation, one of the only apparent looming certainties is that value is moving up the industry chain: to the video production and content ownership end – as reflected in the growing number of deals whose aim is to allow the protagonists to secure a foothold higher up the value chain.