The Changing Face Of Telecoms

Earlier this year, IEG published a report in which it explored the pace of change in the telecoms sector. Against a backdrop of technological disruption and industry mega-mergers, it identified five key trends for rights holders considering working with companies in the sector.

Blurred Lines: According to IEG, wireless and PayTV are now one category – not the two distinct sectors rights holders have historically worked with. “Cable companies now offer wireless service, while wireless carriers are beginning to offer pay TV. Case in point: T-Mobile plans to launch a PayTV service following its acquisition of Layer3TV, a broadband cable provider.” This trend is driven by a desire among TMT firms to enhance their existing offerings, gain new customers and access new revenue streams, says IEG. For rights holders, the downside of this is a reduction in the number of categories they can sell to. However the upside is that these partners are an increasingly potent way of distributing content and messaging (see next point). 

Pipeline To Content Creation: Looking to unlock a new source of revenue, IEG says telecoms are acquiring digital media companies to build audience, drive engagement and, ultimately, ad revenue. “Verizon is leading the charge on the acquisition front. The telecom in 2017 combined AOL assets with its new Yahoo assets to create Oath, a content company that owns Yahoo!, the Huffington Post, Rivals, etc.” In this context, adds IEG, the likes of Verizon “look to leverage sponsorship to build their digital audience through unique content.” In other words, there is more scope for content-based collaboration.

Interest in Sports Media Rights: Telecoms look to build their digital audience via exclusive content, concludes IEG. “And some look to acquire streaming media rights as a part of sponsorship packages.” This interest in sport puts telcos in the same league as Amazon, Facebook, Google and other tech companies, many of which are using and/or exploring sports media rights to engage with audiences.

Reward Programmes: IEG identifies a growing use of reward programmes, “which are used to retain customers and reduce churn, with nearly every company using sponsorship to access tickets, experiences and other perks that can be shared with customers”. IEG adds that Verizon “uses its rewards programme to drive ad revenue. Customers who sign up must share web browsing history, location data and app usage, which can be used to serve targeted ads.” Others in this arena include AT&T, which works with Live Nation; O2, which has built O2 Priority around the O2 Arena, rugby and music; and T-Mobile which has reward links with Major League Baseball. The message here is that rights holders that have hot tickets and an interesting fan base profile are especially interesting to telcos.

Video Viewing = New Sponsorship Category: The growing number of consumers watching TV over the internet has created a new category to pitch, argues IEG: OTT streaming services. “A growing number of companies are using sponsorship to promote their streaming services and drive consumer engagement. Major League Baseball secured YouTube TV as presenting sponsor of the 2017 World Series.” YouTube activated the partnership with original World Series-themed content, ringside commentary from MLB athletes and YouTube personalities, and a national promotion among other activities.

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