NEWS

Reality Check: What AT&T’s Time Warner acquisition says about the big data challenge

November 22, 2016 - Openet

AT&T’s recent announcement that it is to acquire Time Warner for the eye-watering sum of $85 billion underlines two things: namely that telco’s and communications service providers are rapidly attempting to reverse declining fortunes by increased diversification; and second, that the era of CSPs as a one channel revenue stream is well and truly over.

CSPs and other service providers who cultivate large user bases are now wise to what many in the digital content game already know: the more content you have, and can offer, the more of a power player position this puts you in.

Increasingly converged operators such as AT&T, a global powerhouse in offering omnichannel, multimedia and multiplatform services to consumers, are acutely aware that engaging content holds the key in their ability to monetize and diversify, as well as lock in current customers. The fact is the vast and multidimensional content world is now frequently emanating from single sources: Amazon.com, Netflix and HBO are good players for operators to learn from. From a consumer perspective, this luxury of engaging content choice, combined with convenience in terms of multichannel access will deliver major differentiation and service upsell potential to AT&T.

But what lessons should major operators take from this acquisition?

The power of content is something that AT&T and other major operators have been aware of for some time. In fact, AT&T has been on the acquisition trail for a while – it gobbled up DirecTV last year, instantly becoming America’s largest pay-TV provider. BT in the U.K. continues to take up major investments in sporting content, securing rights to high-profile football packages to secure customer loyalty as a pay-TV provider.

Rumors persist around other potential acquisition targets and tie-ups, including Vodafone, Sky and potentially Liberty Global recently, which has since petered out. And now it isn’t simply operators eyeing up media companies, as T-Mobile US is now reported to be the next hot acquisition target for some of the world’s largest content providers.

Can multistream imply multiscreen choice?

Most of the time, an operator’s first acquisition represents the quickest way to better monetize existing and emerging video content. The steady migration of users to streaming and on-demand services like Netflix and the rapid move of rich content bundling, optimized content for the user and media set-top streaming boxes has cannibalized traditional TV viewing figures and fragmented it even faster and further. These separate strands of activity have made it extremely difficult to measure and ultimately monetize through associated marketing and advertising activity. The rise of multiscreening means the days of relying on Nielsen’s traditional TV ratings to measure eyeballs on content are effectively over.

Pay-TV providers and other network operators are having a hard time gripping onto this audience, as it increasingly fragments and difficulty therefore in shifting new offers their way and monetizing that audience. Despite its importance to the bottom line, it’s also more difficult than ever to accurately count how many people view specialty TV content, particularly if they are streaming it with a specialist provider. This creates a significant challenge in the eyes of the brand marketers that the operators will look to recoup the multibillion-dollar investments being made in the content.

Read more at RCR Wireless

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