TV broadcasters and platform operators need to ensure that consumers are able to access the linear and non-linear TV and video content of their choice both on fixed-line and mobile infrastructures on their preferred reception devices.
This development is boosted by the growing importance of OTT services which follow a multi-platform and multi-device approach as part of their distribution strategy, the panellists agreed at the opening discussion of cable, satellite and broadband trade fair ANGA COM 2014 on May 20 in Cologne.
Mike Fries, president and CEO of Liberty Global, said that the role of cable operators would be to make “the tons of content” out there easily accessible for consumers on any device. This was the technical challenge the industry is solving, in the case of Liberty Global through its multimedia home gateway Horizon. “We will never be a dumb pipe,” said Fries. Consumers should instead see a cable operator as a supermarket. “We need to ensure that our shelves are stocked with the right products.”
Fries said that Liberty Global would be open for business models which prioritise certain content providers to ensure high quality of service. The remaining bandwidth would be big enough for all other players as Liberty Global had no interest in making consumers angry. Fries said that regulators should not interfere in this area as this would not make the internet better. In his view, there should be only one regulator anyway: The consumer.
The mobile industry in Europe is “in real trouble”, said Fries, arguing that it was too fragmented, very competitive, but not providing enough revenues required for network upgrades. “You’ll see consolidation in the mobile industry”, he predicted. “That’s a good thing. We want healthy competitors in that market.”
In the cable market, Fries sees the need for further consolidation as this would be beneficial for consumers. “Cable struggles with a lack of scale.” Liberty Global’s German subsidiary Unitymedia Kabel BW only covers three of the 16 federal states, but the cartel office Bundeskartellamt has blocked previous attempts to create a nationwide cable operator. Fries said the cable operators’ competitors Deutsche Telekom, Kabel Deutschland/Vodafone and DTH satellite have nationwide reach. This would make it difficult for cable to grow.
Wolfgang Elsäßer, managing director of Astra Deutschland, doesn’t expect OTT to become a mass phenomenon as the fixed-line broadband and mobile networks would not be able to cope with all the data traffic generated through TV consumption, not to mention the throttling kicking in at some tariffs after a certain data volume has been reached. Thus traditional infrastructures like DTH satellite would remain relevant for linear TV distribution for a long time.
Conrad Albert, member of the executive board of ProSiebenSat.1, said that the commercial TV group considers OTT to offer new chances for the content industry. ProSiebenSat.1 has been a player in this market for many years with its online video library maxdome. The TV group now generates almost one third of its turnover with digital offerings, said Albert, adding that ProSiebenSat.1 sees this as a growth market. “Infrastructure without content is boring.” That’s why there were be better chances for good content today than ever before, according to Albert. “Television has never been more alive than today.”
Michael Hagspihl, head of marketing at Telekom Deutschland, said that the telco follows a universal availability approach with its IPTV platform Entertain by making its linear and non-linear content and services accessible to customers on fixed-line networks, Wi-Fi at home and mobile networks on the go. Like Fries, Hagspihl also spoke out in favour of business models which guarantee content providers a certain quality of service. The turnover generated through these agreements could in return be invested into network upgrades. In response to concerns about equal treatment, he said that all content providers would be free to sign such quality of service deals.
Manuel Cubero, CEO of Kabel Deutschland, said that the media world converges, both content (TV and internet) and infrastructures (fixed-line and mobile access). He expects cable operators to become hybrid providers of fixed-line and mobile services in future, reflecting why the take-over of Kabel Deutschland by Vodafone made sense. This would enable Vodafone to offer consumers all services from one source as bundled packages.
Cubero said that the cable industry was lucky that, through DOCSIS, their infrastructure enables high-speed internet with more than 100Mbps. Cable operators would therefore be perfectly prepared for bandwidth-hungry OTT services. The trend towards high-speed internet would boost their turnover. According to Cubero, Kabel Deutschland currently achieves an average monthly turnover of €11 with a cable TV customer, but more than €30 with a 100Mps internet customer. Kabel Deutschland would therefore embrace the new OTT players as they provide the cable operator with new broadband internet customers.
