Wednesday, December 14, 2005

Telcos and content

In my mail I found an observation of Fred Kappetijn, one of the directors of content provider Mobillion, on the role of content in telecoms

"When discussing the roles of the different players in the field of electronic media in general, and the new TV services in particular, I think it is important to make a distinction between the roles of:

- the content owner (intellectual property right holder)
- the content producer (Hollywood, sports clubs, news media, etc)
- the content organiser/packager (TV stations, ISPs)
- the content distributor (telecom).

It is very clear that the telecom operators want to extend their business by playing the role of content organiser. They realise they have to organise, package, market and sell the television type of content to be sure that they will have a nice return on investment in the broadband networks.

I don''t see telecom operators moving into the role of content owner or content producer. It has been several years since telcos in Europe, the USA and Australia wanted to buy media companies. I don''t expect a similar strategy at the moment.

Publishing and broadcasting are totally different businesses from running telecommunication networks. Different periods for return on investments and different business cultures (rational technology people versus emotional content people) make it almost impossible to merge or to conduct both activities properly. The failed merger of AOL and Time Warner is a good and dramatic example of this wisdom".



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