Expensive exclusive content: Is it worth it?

Expensive exclusive content: Is it worth it?

As Sky and BT spent a combined £5.1bn on Premier League football rights Mobile takes a look at the role content plays in the mobile industry and how it will develop going forward…


Platform or provider

People are consuming more content than ever on their mobile devices and there have never been more parties trying to exploit this trend: From the music streaming services provided by a number of manufacturers to the Spotify and Sky Sports deals from Vodafone. Knowing who the are right people to deliver mobile content is rarely clear. Figuring out whether you should focus on being the platform for third party content or if you should provide it yourself is a dilemma for all those involved in the mobile platform. It’s a subject that network operators in particular must consider with the rise of quad play accelerating the issue as a compelling TV proposition automatically requires access to popular content. It was interesting to see the difference of opinion between Vodafone CEO Jereon Hoencamp who took the view that content was the driver of mobile activity, whilst Dave Dyson said it was the connection itself that really mattered.


The load to bear

Exclusive content rights are incredibly expensive and the return on investment is rarely straightforward. The number of available rights for the most popular content is also small and fiercely guarded by those in possession of them. It means anyone thinking of adding something exclusive to their package needs to have very deep pockets and must be prepared not to see a return on their investment for a while.

There are countless examples of companies who have attempted to challenge the likes of Sky and failed. Some firms have carved out a niche in being able to serve up others content such as Talk Talk, but achieving significant revenue from this method can be a difficult task. However, BT are the only firm to mount a significant challenge to Sky when it comes to content, this has been built almost entirely on securing sports rights. There are of course other exclusive content deals out there, but sport, and in particular football, is one of the few areas where there is a demonstrable willingness of the consumer to pay a premium price. Of course, tapping into that market is an expensive and risky process. BT has been successful so far in using its sports rights to maintain its large broadband customer base and how mobile fits into that will be interesting to see. If they leverage their rights to attract customers to EE it could be very disruptive.


The death of TV

What makes the high price of content even more ridiculous is that looking forward the traditional barriers that keep content exclusive and expensive are being broken down. Online streaming has been embraced by many broadcasters, however the illegal free alternatives are already beginning to change things. Look at the world of television programmes, services such as Netflix produce content that is available as readily as free online options and in doing so are hasten the demise of the traditional TV content experience.

The next generation of content consumers won’t see the television as the focal point and online it is almost impossible to fence off exclusive content for a price. Developing new ways for it to be delivered will be critical to everyone whose service benefits from the consumer’s need for content.


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