Big data and how telecom operators can extract information from their growing collection of services is set to determine success in the market.
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.
The big data conundrum
Audience fragmentation is also doing away with specialty service providers’ ability to collect the most accurate, up-to-the minute data on audience and demographic trends. Measuring all the separated-out strands of data that is pouring in has become a mammoth task: collecting data emanating from set-top boxes, on-device data and other sources into one unified dashboard with meaningful outputs is incredibly hard. Combine this with a need to collate and extrapolate the data in a data warehouse or central repository and the task becomes positively gargantuan. And with increasingly different types of data from disparate sources often stored and managed in separate silos, it becomes tougher to providers to get their hands on that audience or segmentation information in a timely way without the use of expensive analytics platforms, or the right data scientists to extrapolate findings.
Quality, comprehensive measurement and theorizing in a rich way is what’s needed to bring the right information in, and this will afford the greatest degree of insight. This audience measurement data is highly targeted and relevant enough to inform programming, ad inventory and placement decisions, and help operators to better utilize this data as they negotiate content carrying fees with the content providers
What’s next for audience measurement? Some big data hard truths
The ambitious plans of many telco’s to become content providers themselves will fall at the first hurdle if it hey cannot find better ways to monetize the data they collect. Simply put, without such critical video data usage analytics at their fingertips, rich content and media providers will have all the cards at the poker table, but not be able to tell who is holding what hand. Without this crucial ability, they will not be able to personalize their video offerings for viewers and monetize these offerings with targeted, appropriate advertising.
TV and other video service providers can improve the deep data pool of viewing data, and organize and manage that data more effectively, by developing and deploying better video usage analytics tools and by acting on that data in real-time. But first they must acknowledge some hard truths: they’re not collecting the available viewing data as effectively as they should do, and most are not organizing, managing or analyzing viewing data in an effective way.
Upon acknowledging these two critical points, service providers can start pivoting away from their old and often obsolete data collection systems. Rather than trying to re-tool legacy data systems they should start by building in fit-for-purpose data management dashboards, which action the right intelligence from complete, accurate and valid data sets. This enables an operator to make better business decisions with meaningful and timely information from diverse big data analytics sources.
Wagging the tail of the dog: acknowledging big data’s shadow
Finally, and try as it might, the “big data issue” simply will not disappear for pay-TV and other video service providers. If anything, the problem only promises to get bigger as audience fragmentation continue to grow and consumers continue to watch more programs on more screens than ever before, at a time of their choosing. If you are a content or video service provider, the onus is on you to start taking the big data issue more seriously.
Service providers must start doing a better job of collecting the viewing data they need and can act upon. They must also sort, organize, manage and analyze all that data so they can put it to work. Once they accept these two basic tasks, they’ll be able to move forwards and reach the other major challenge: counting and tracking the viewership they reach.
And they must be ready to embrace the standards-based open solutions for total audience measurement that the market is now increasingly offering.
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
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