Investing in original content: Is it worth it?

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Are BT, AT&T and Swisscom making an attractive return on their major investments in content?


Format: PDF filePages: 51 pagesCharts: 30Author: Gareth Williams, David PringlePublication Date: May 2019

Table of Contents

  • Executive Summary
  • Introduction
  • The case for investing in original content
  • More and more competition
  • The importance of multiple content distribution models
  • Telco revenue from content and related services
  • Swisscom sells content with strings attached
  • Investing in rights holders to secure original content
  • It is about the packaging, as well as the content
  • Limited advertising
  • Enriching the viewer experience
  • Mixed financial results
  • BT and its big bet on live sport
  • BT TV reaches an inflexion point
  • BT TV – getting more expensive
  • Is BT Sport changing direction?
  • BT’s broader branding strategy
  • BT as a content aggregator
  • BT Sport is available to rivals’ pay TV customers
  • Is BT making a financial return?
  • Is there a case for continued investment?
  • AT&T takes on Netflix
  • King of content?
  • DirecTV Now: A lackluster start
  • Takeaways: Walking a tightrope between old and new
  • A shaky financial performance to date
  • Conclusions

Table of Figures

  • Figure 1: The differing strategies of Swisscom, BT and AT&T
  • Figure 2: AT&T’s Entertainment Group is dragging down the broader business
  • Figure 3: Rating the different elements of telcos’ original content strategy
  • Figure 4: Telco content distribution models
  • Figure 5: Measuring return on investments in content
  • Figure 6: Swisscom’s TV subscriptions and market share
  • Figure 7: Summary of Swisscom’s TV products
  • Figure 8: Cost and availability of Teleclub Sport
  • Figure 9: The growth in Swisscom’s TV Connections and Bundles
  • Figure 10: Swisscom’s content strategy hasn’t arrested the decline in wireline revenues
  • Figure 11: Swisscom’s ballpark annual revenue run rate from TV
  • Figure 12: BT TV packages, February 2019 compared to end 2015
  • Figure 13: BT has bought more low-grade matches and is paying less per game
  • Figure 14: How BT tries to monetise its sports content
  • Figure 15: A breakdown of BT’s brands and target segments
  • Figure 16: BT Sport App packages across its multiple brands
  • Figure 17: How BT is using content partnerships to broaden its offering
  • Figure 18: BT Sport has helped to drive a major uplift in annual revenue
  • Figure 19: BT’s Consumer Division has struggled to increase profitability
  • Figure 20: BT’s TV and broadband customers are now flatlining
  • Figure 21: Growth in BT TV and BT Sport connections has tailed off
  • Figure 22: BT’s consumer fixed line revenue has been fairly flat
  • Figure 23: BT Sport residential and commercial revenue estimates 2018 and 2022 Figure 24: AT&T’s telecom, media and entertainment businesses (February 2019)
  • Figure 25: AT&T’s pay TV and SVOD services (as of February 2019)
  • Figure 26: The Entertainment Group’s revenues are slipping
  • Figure 27: AT&T’s traditional pay TV business is in decline
  • Figure 28: AT&T’s broadband connections are fairly flat
  • Figure 29: AT&T’s Entertainment Group is seeing its top line squeezed
  • Figure 30: AT&T is combining inventory to help increase ad spend

Technologies and industry terms referenced include: Advertising, AT&T, BT, digital media, distribution models, media content, Netflix, new business, pay-TV, sports rights, Swisscom