The existence of a totally converged mobile/television market is one that has been heralded many times over, and to some extent we do exist in a mixed-up market. It’s pretty common to stream live TV on our mobiles, and there is little surprise when a broadcasting giant announces a move into mobile or vice-versa. However, on the whole, TV and mobile bills have remained separate, and television’s traditional powerhouses are still hugely influential.
Undoubtedly, video is a crucial part of the mobile experience – the difficulty for the mobile industry is how it engages with this capability. Most mobile companies that cross the divide will claim to be using non-traditional routes to market. But any major engagement with video will still involve a deal with television’s usual suspects at some stage.
Enter the operator
Despite the fanfare over quad play there still remain relatively few examples of mobile phone companies offering television. TalkTalk and Virgin Media have the longest-standing television propositions. Although both companies follow a pretty traditional formula in terms of subscriber model and content, the two brands have seen a relative level of success in cross-selling to different subscriber bases. The numbers, however, have not been strong enough to convince others to take the plunge.
The launch of EE TV in October heralded the first entrance of a mobile operator in the UK TV market. At the time of the launch CEO Olaf Swantee said: ‘Our customers are not ringing us up asking for a quad play product. But we believe that it is a service they will like.’ Since then the take-up has been steady rather than stratospheric.
EE’s TV package differed slightly from others on the market; there was a focus on multi-screening and enabling mobile to be at the heart of its TV experience. However, when it came to content, the focus was largely on Freeview or ‘Freeview customers who were looking for a bit more’ as it was described at the time. It demonstrated how crucial content deals still are when it comes to the television space. Regardless of how overpriced or short term any deals may be, often the desirability of a TV package still comes down to what shows or exclusive sport you have on the roster.
It may be a little harsh to judge these mobile brands too heavily on these numbers. Cross-selling is, of course, a gradual process that requires competitive pricing and regular marketing to achieve cut-through. It’s a method of customer acquisition that’s often associated with phone selling and direct marketing. So it was interesting that EE has stated on a number of occasions that it wants to sell its quad play proposition through retail stores.
The network’s CMO, Pippa Dunn, told Mobile that this was because it was a product best ‘explained through demonstration’. The strategy differs from many other TV providers whose ventures into retail tend to focus on pop-up stands and telesales, and both industries will be watching its progress with interest.
An OTT technique
An interesting recent addition to the television space has been Lebara, whose OTT television service Lebara Play has to be one of the most innovative on the market. The brand focused on meeting the demands of its core migrant community customer base by securing deals that would deliver content from their countries of origin. The unique service uses a payment platform that uses cash as well as credit card payments. Lebara Play can be purchased month by month and can be accessed using an app or via a set-top box.
‘The crux of the solution is the ability to pay cash, particularly in the markets we operate in where customers are a lot happier paying by cash rather than using a credit card,’ says Aditya Thakur, CEO of Lebara Play, ‘People can buy cards that let them access the service, and for them that’s a big differentiator compared with classic OTT products, which only enable cards because they don’t have a readymade network. So in that sense we’re fairly privileged to have our flagship brand already established for us.’
In a similar way to EE, Lebara is attempting to make use of its existing sales and distribution networks to sell its TV service. The MVNO is scaling it up in the same way it did with the mobile side of the business, Thakur continues: ‘Essentially, we intend on leveraging our existing distribution network that has been built over 14 years of sweat and work. That’s around 250,000 networks throughout Europe and across all our mobile countries today.
'We’ll be going for different models for different environments. So for set-top boxes we’ll be going for a different profile to the start-up packs, which are sort of like monthly packs, and we intend to do that very, very aggressively.
‘In terms of training there are three different levels; there’s a distributor level, there’s a wholesaler level and there’s a retail level. So the wholesalers can hand their training on to the retailer. We have the business development executives as our salesforce who go out to retailers and explain the product as they go. The way we see it is that it’s going to be a process and we won’t get the entire base to begin with. However, we intend to very aggressively reach out through all these means and initially train 20% to 30%, slowly expanding over a period of time.
‘The other thing about retail is that once you put the commercials in place, once you set the commissions, it acquires a life of its own. Partners become interested in what the product will do for them in terms of generating revenue and income, then they want to learn about the product. Incentives are a big part of it, and in that we follow in the footsteps of the mobile product. We know what it takes to incentivise the mobile base and we’re excited to push a product like this.
‘Once we’ve reached a critical mass then we’ll branch out into mass media, using assets that we already have; for example, we have airtime deals with certain TV channels. The interesting thing about this market is that the best source of migrant advertising could actually be in their popular channels at home, because that’s where they watch it.’
While Lebara’s proposition differs vastly from the likes of EE in content and audience, the OTT modular nature of the service is certainly one that stands out. With more companies looking to offer TV, seeing which model is used will be interesting to monitor. Vodafone’s entrance into the TV space has been anticipated for a while now, and when it does come to pass, who it draws inspiration from will be significant.
Television is perhaps an outdated term when it comes to mobile – we live in an age of non-stop video access and live-streaming. It’s a place in which schedules are being replaced by action events, and activity can be analysed in ways that were previously unheard of. Increasingly, content needs to be available in its entirety through on-demand services, making live, exclusive events even more important to traditional TV brands.
The annual Ericsson ConsumerLab TV & Media Report found that streaming video is now almost as popular as traditional TV watching. Ericsson’s data was based on interviews with more than 23,000 people, revealing that 75% of consumers watched streamed content several times a week, compared with 77% who watched scheduled broadcast TV programming several times a week. A key aspect of this trend was of course mobile, which has enabled users to take viewing habits across multiple screens and on the go.
‘The landscape is changing rapidly, and business and delivery models will have to keep up with that pace of change if they are to continue to deliver perceived value to consumers’, said Niklas Heyman Rönnblom, senior advisor at Ericsson ConsumerLab. ‘The results of the study are clear – media companies need to rethink how they create and release content, while the focus for TV service providers is on delivering the highest possible quality for viewers, no matter on what device they are watching.
‘Our research shows that 56% of those who pay for subscription-based video on-demand services prefer all episodes of a TV series to be available at once, so they can watch at their own pace, compared with 45% for those who don't pay for S-VOD. This shows the impact that such services have on consumer viewing behaviour and requirements.’
Mobile is enabling changes in the way that people consume video content, yet entering the TV space still remains a complex and expensive task. The most successful companies will be those who are proactive rather than reactive in this consistently changing landscape. It’s a tough task foreseeing how things will change, with the stakes for the winners and losers growing by the day.