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Telcos drive digital content revenues by competing with OTT

OTT devicesConsumer spend on digital content is expected to reach $180bn next year, which represents a 30% leap on last year’s numbers.

According to recent numbers by Juniper Research, this revenue growth is driven by telcos who are jumping on the bandwagon to compete with over the top (OTT) players by offering their own on-demand and IPTV product.

Juniper also point out that telcos have recognised the need to invest in attractive, original content to compete with the award-winning shows developed by both Netflix and Amazon.

The research cites the example of Spain’s Telefonica, which is to produce eight to ten TV series per annum from 2017, while both BT and AT&T have indicated that it might commission original entertainment in the near future.

Meanwhile, several telcos have partnered with leading OTTs to offer consumers bundled ‘zero-rated’ content that does not impact on monthly data allowances. The research argued that more operators might consider enhancing the relationship through the acquisition of a strategic stake in the content provider, as with TeliaSonera’s investment in Spotify.

The research also highlighted Twitter’s recent acquisition of the online rights for the NFL as the first move by an OTT player into the sporting arena, arguing that other players could follow suit.

However, research author Dr Windsor Holden points out that the spiralling cost of most premium sporting rights means that bidders for exclusive live rights must now pay several hundred million dollars per season.

He added, “With most streamed audiences well under a million, this is likely to deter online-only players in the short and medium term.”

Chris Read is a freelance journalist and an exclusive contributor to IP&TV News.

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