Telefonica has launched a bunch of new digital-service initiatives that are aimed at transforming the company’s revenue model, but interestingly most of them are aimed offshore rather than in-market. They’re working with Etisalat to add cloud and other mobile enhanced services to emerging markets, they’ve added mobile-billing options for online purchases in countries where credit card penetration is low, and they’ve backed the Mozilla Firefox OS to reduce smartphone costs in emerging markets.
European operators have been going offshore more than most; on a recent trip through Latin America I saw players like Telenor emerging as major market contenders. I suspect that part of the problem is that the EU operators are afraid that EU telecom regulations, which have been aggressive on roaming costs, data charges, and infrastructure sharing, might inhibit ROI expansion from investments in-market. The other factor is that in-market service enhancements demand a real service-layer investment, and operators are still looking for the magic formula that links cloud infrastructure to services. For example, video services are a big target for operators, or at least they have been historically. The spring survey results I’m just now finalizing suggest that video monetization remains a titular goal but that execution on meeting the goal is lagging. The cloud, on the other hand, was always the third-priority monetization choice and it’s now leading in execution.
Speaking of video, if you’ve followed my blogs on video/media, you know I’m a believer in the notion that OTT on-demand content has to look more like linear viewing to work. You need to have a channel guide, channels, time slots, etc. and you have to blend broadcast material with streaming to create a unified experience. There’s a commercialization of a video model in the UK that at least takes some steps in that direction, from YouView. But so far I hear it’s not quite hitting the mark.
YouView has a DVR-like thing that is both an engine to search online content and channel guides using metadata, and a mechanism for cataloging a user’s own content assets. What it lacks so far is a consistent interface. As you may recall, I’ve suggested that users needed “virtual channels” that were composed of available on-demand material and populated based on viewer interest. So I might have a “Wildlife” channel because I’m interested in wildlife travel and photography. If I don’t find something interesting on channelized TV, the hypothetical system could give me some wildlife programming from online sources, stuff consistent with what I’ve viewed before but eliminating things I’d viewed recently and tagging the stuff I viewed some time ago and might be willing to watch again. Absent this, all these gadgets tend to be conveniences, not drivers to new viewing behavior.
The cost is another factor. YouView is over four hundred bucks, and while it’s gotten a fair level of acceptance from retailers, only one manufacturer has stepped up to build the box. The company says that future products will be cheaper, and my UK sources say most people are saying “Fine, then I’ll wait”.