Do Carriers Need to Own Content?
As the voice business dies a
slow death amid the emergence of Skype, Google Talk, etc., carriers must explore other ways to generate revenue. This has seen
many carriers focus on managed and hosted services for businesses,
high-speed Internet access, wireless communications and, most recently, television.
But what about content such as video and games? Do carriers need to own
content or simply license it? This question was raised in a recent Newsweek
story that cited Video Networks Ltd. as the new wave of telecom
carriers focusing on producing in-house content such on-demand
television and video. Newsweek also looked SK Telecom, which spent
$14-million recent for a stake in a movie product company, and
$12.6-million for a stake in YBM Seoul Records. In North America,
carriers are getting into the game with distribution deals and their
relationships with movie studios and television networks will likely
get deeper as content is pushed to new devices. One exception to the
rule in North America is BCE Inc., which owns a content portfolio that
include the CTV, a national TV networks; the Globe & Mail, one of
the country's two national newspapers; and TSN,
a popular sports
channel. BCE has talked about getting rid of its content assets because
they are “non-core” but if voice goes away, then wouldn't content
become a valuable thing to have? For BCE, the decision to sell or not
comes down to having full access to the “content” though a licensing
agreement - even
the assets are sold. This is a tough balancing act, which
explains why the content business has been quasi-limbo for the
past
year while BCE figures out how to structure a deal that lets it
eat its cake and have it too.
