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The long tail – from ‘don’t go there’ to ‘get on board’

By October 5, 2016 No Comments

Recently, this writer was chatting with a colleague about the growth of high-quality video content. He happened to mention that his 11 year-old daughter was already editing 360-degree video content in school.

Not that long ago the “long tail” was another term for “don’t go there” for many operators. It referred to the connectivity and content stuff that they would leave for wholesale providers to look after. Operators would simply be happy to connect those wholesalers at cost and take a proportion of whatever the potential revenue was. There might be very little revenue or occasionally there might be a lot. Either way, once their costs were covered they were in a risk-managed place. They were able to share in unplanned revenue for very little cost, most of which was fixed. So called “3rd parties” manged the content and associated regulatory risks. To be fair, operators were often just coping with the growth of data and SMS in their core businesses.

As data has become more available to consumers on an unlimited basis, operators have been reinventing themselves as more nuanced digital service providers and in-house content generators (e.g. BT Sport in the UK). This has provided much needed value-add as well as differentiation. Something else has been going on at the most progressive operators however as they have realised the battle ground is no longer on the much worn centre ground of unlimited data. Competing only with more and more unlimited data seems akin to supermarkets only competing by selling more of their “staples” like milk and bread at or close to cost. Supermarket profit-generators are more likely to be in the much wider range of differentiated products or “occasional items”.

Similarly for operators, virtualisation of network elements is enabling more rapid launch and tighter control of unique services and service enablers.  This is music to the ears of the “micro” segmentation-lovers in the marketing department of such advanced operators. It provides more control of a wider range of services at lower costs.

While the “11 year-old, video-editing daughter segment” is unlikely to be a well targeted segment amongst too many operators, that might change. Similarly, virtual reality is perhaps as likely to ignite the enthusiasm (or revenue) of so-called “traditionalist” classical concert-goers as “innovative” gamers. Some of those traditionalists might even represent more value over time. (By the way, if you doubt this, check out http://www.laphil.com/vanbeethoven ).

Micro-segmentation can now realistically be driven by big-data enrichment. It can be managed closely and backed by the ability to rapidly activate service slices towards consumers or service-enablers for still well-liked wholesale providers and partners. Services can be enabled in days or hours as opposed to what previously would have taken months and a huge amount of cost.

Here’s to the outliers, the hackers, the service-spinners and the under-valued “segments of one” in the long tail.

 

For more information on Virtualization, Big Data and Wholesale Markets, head to:

https://www.openet.com/learning-centre/whitepapers