Can telcos compete in the new TV market?


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Providing TV and video content can still be a profitable business, but only if telcos play to their strengths by focusing on aggregation, distribution and recommendations.

Shifting dynamics in the TV market

Many telcos around the world have longstanding and relatively successful TV businesses. But TV is no longer the distinct proposition it used to be. It has largely been subsumed into the broader video market, which encompasses both professional and amateur content. The television is just another device through which you can watch everything from five-minute videos on how to make scrambled eggs to blockbuster movies and major sports events.

As people want to consume video on multiple devices in multiple locations, TV is also moving from being a central household service to a much more distributed form of consumption. This trend will be even more apparent as children who have grown up with smartphones begin to set up their own households.

At the same time, the TV itself is now a more versatile piece of hardware than it used to be. A smart connected television can source content from multiple delivery mechanisms and it can be controlled via multiple devices and user interfaces (see the graphic below).

A smart connected television is a versatile piece of equipment

Source: STL Partner adaptation from die medienanstalten’s Video Trends 2023 report

Now that the TV has opened up in this way and people are watching video on mobile phones, laptops and tablets, telcos should think of their TV services as competing with any entertainment or information video content, regardless of the source. YouTube, Instagram and TikTok are competitors, as well as Netflix and Sky.

As well as competing and co-operating with major broadcasters, most telcos are now in co-opetition with the major internet platforms and Hollywood studios, such as Disney and Paramount. Many of these players are trying to reach consumers directly through their own apps, while also looking to forge distribution agreements with telcos and other aggregators, such as Amazon.

This report explores the development of the complex and crowded “new TV” market, before analysing the strategies of Deutsche Telekom in Germany, Telefónica in Spain, Reliance Jio in India and SK Telecom in South Korea. It then draws some conclusions and makes some recommendations based on this analysis.

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Table of contents

  • Executive Summary
    • Recommendations
    • Next steps
  • Introduction
  • The new TV market
    • FAST opportunities for telcos
  • Diverging fortunes in Germany
    • Summary
    • A tug of war
    • To bundle or not to bundle?
    • Getting the right global and local content
    • BT – a cautionary tale for Deutsche Telekom?
  • A turnaround for Telefónica in Spain?
    • Summary
    • Pressing the reset button
    • Building a digital supermarket
  • Reliance Jio aggregates content in India
    • Summary
    • Aggregating local and global content
    • Securing global content
    • Covering the tastes of 1.4 billion people
    • Can advertising become compelling?
  • South Korean telcos point the way
    • Summary
    • Growing pay-TV businesses
    • KT claims greater engagement
    • More segmentation and personalisation
    • Co-opetition with major internet players
  • Conclusions and recommendations
    • The pursuit of selection and choice
    • The creation of a compelling viewer experience
    • On-net versus off-net?
  • Index

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Technologies and industry terms referenced include: , , , , , , , , , ,

David Pringle

David Pringle

David Pringle

Senior Associate Analyst

David Pringle is a Senior Associate Analyst at STL Partners, specialising within our Consumer Services research stream. He spent five years as the European tech and telecoms correspondent for the Wall Street Journal and provides editorial and analytical services to a range of organisations in the tech, media and telecoms industries, as well moderating panel discussions at industry conferences, webinars and on Mobile World Live TV. David has a BA in English and Politics from York University.