Australian Telco Telstra acquired Ooyala, an On Demand Video distribution and content monetisation platform. Steve Davis, General Manager APJ at Ooyala thinks this combination is ideal. Here is why.

 

Traditional linear TV broadcasters are in a difficult spot. Much like the printed newspaper industry, the customers and advertisers are moving to other content options. In some countries, the shift from cable television to online shows double digit declines. What is currently happening and trending in the online and offline TV industry, we asked Steve.

“Is quite obvious that customers are cutting the cable. Comcast in the US e.g. is getting squeezed by the rising costs of premium TV content and by the competition of Over-The-Top providers like Netflix or Amazon. The number of alternatives combined with the change in customer behaviour which in turn drives a shift to mobile is driving this. You don’t need to be an industry expert to understand that HBO and Netflix have new content formats that are much better adapted to a mobile online lifestyle. These and other similar content providers have two things in common, they offer a great customer experience and they collect data that helps them fine-tuning content formats.”

 

So, is linear TV dying?
“Linear TV is certainly changing, although for some content live linear TV is still perfect. Sports e.g. is ideal for live broadcasting. But it is in decline and without e.g. digital formats in addition to live broadcast, consumers tend to move to channels that are completely online. At the same time FANG (Facebook, Amazon, Netflix and Google) are turning in to powerful or potentially powerful broadcasters as well. The TV industry and specifically the cable companies are bleeding customers as a result.”

 

Then why do you think that telcos have a future in the television landscape?
“The telcos have, like FANG, tons of customer data. If they combine this with on demand content delivery they are in a similar, if not even more powerful, position to offer both content and advertising in a high personalised and optimised way.”

 

While this sounds promising, have we not seen telcos trying this in other areas before and fail miserably? After all they are ‘just’ a data pipe these days with a bunch of antennas. How can they change the internal culture, attract talent or set up services that would allow them to be successful in content strategy?
“It is true that telcos can only do this if they address these points. In my opinion, this is what Telstra is doing by acquiring a company like ourselves and letting it run under its own brand and management, while allowing access to internal customer data. Other telcos are moving into the content business as well, with the biggest example being the AT&T/Time-Warner acquisition. Rest assured that there is more to come in the second half of 2017 in this area, across the globe.”


Editor: Matthieu Vermeulen