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June 28, 2006
Content is THE Differentiator for Media Distributors
Broadband speeds offered by telcos and cable operators are likely to converge, Cable World argues, meaning that content will remain king in media:
. . . broadband competitors will eventually reach virtual speed parity and, like the superpowers of the Cold War, could arrive at a stalemate. As a result, providing exclusive content and applications to broadband customers might provide the crucial competitive edge. "High-speed data pipes are quickly being commoditized," says Tanya VanCourt, VP and general manager of ESPN Broadband and Interactive Television. "Providers have to figure out how to differentiate themselves and their relevance to their audience." . . .
. . . cable operators are already forging content alliances and creating concepts that capitalize on broadband speeds. In May, for example, Comcast partnered with IGN Entertainment to launch Game Invasion, a new broadband gaming service designed to drive gamers to its premium 8 Mbps broadband tier. In October, Comcast partnered with programmer OLN and the National Hockey League to stream live games over broadband. A month later, Cox announced Premium Access Pass, which offers subscription-based content from its "Best of the Web Zone" and "Sports Zone" packages of broadband video and other content. Time Warner Cable, meanwhile, offers broadband content from dozens of cable programmers through its Road Runner portal and in partnership with affiliated America Online.
At the same time, MSOs' content strategies are evolving. "We're still in the testing phase in terms of content business models," says Cook. Companies in the Web video space that would like to partner with MSOs and telcos are anxious to explore new models.
As Internet-based services like Google, iTunes, MySpace and YouTube continue to gain customers with multimedia content, some Internet players wonder whether MSOs and telcos will start their own similar services to compete--or whether they might strike new partnerships with successful Internet content firms. "Will you see the cable companies and telcos at the level of the application space?" asks Greg Kostello, CEO of music-oriented video site Vmix.com. "It's unclear right now. Their portals aren't very visited, and they really haven't figured out that consumer offering."
Content partnerships, however, are moving forward rapidly: AT&T is giving its broadband customers access to Akimbo's library of more than 10,000 videos and to TotalVid's more than 2,600 entertainment and instructional videos. Recently it inked a pact with Starz Entertainment Group-owned Vongo to offer its movie-download subscription service to AT&T broadband customers. In May, it partnered with mobile content aggregator MobiTV to deliver video through nearly 7,000 AT&T Wi-Fi hot spots across the U.S. "Today's consumers are looking for readily available video and entertainment-related content to enhance their broadband experience," AT&T's Sarah Baker says. . . .
VanCourt says broadband access providers should start promoting the availability of such content rather than more commoditized perks like spam protection and pop-up blockers. "[Content] gives consumers a reason to choose that high-speed connection over another one," she says. VanCourt predicts that exclusive broadband content deals could be on the horizon. "There are a number of different business models out there, and people are trying to figure it out," she says. "If history is any indication...there might be some exclusive deals done." She says one historical example in the multichannel world is DirecTV's NFL Sunday Ticket, which gives subscribers exclusive live access to all NFL football games across the country. . . .
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