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Doc Number: lcUS20076306
CBS Launches Mobile Content – A Shift in Carrier Relations?
As reported today by MarketWatch, CBS. Corp. is launching a wireless subscription service that will offer users video-enhanced breaking news and entertainment alerts direct to a subscriber’s mobile phone. This service, which will offer “CBS News to Go” and “ET [Entertainment Tonight] To Go,” will be available in text, picture, and/or video format, depending on the subscription and the capability of the subscriber’s phone. What caught my eye, however, was that CBS has not partnered with a wireless operator in order to distribute its content. Unlike companies such as News Corp. subsidiary Fox Mobile Entertainment and its content distribution partnership with Cingular Wireless L.L.C and T-Mobile USA Inc., users interested in CBS’ new service will work directly with CBS to subscribe.
In fact, this aspect of the announcement is what sets CBS apart from a number of its competitors. The move to the mobile world is nothing new for major content providers – indeed, NBC, News Corp., and even MTV produce a number of mobile offerings. Additionally, CBS already reaches multiple platforms by offering video-on-demand in partnership with Comcast as well as shows for purchase online through Google Video and Apple iTunes.
Abstracting this to a general level, this concept provides the framework for an interesting discussion on the future relationship of wireless operators to content players. While carriers today maintain significant control by virtue of their position in the wireless ecosystem, the entrance of major content providers – companies accustomed to leveraging their content – has the potential to severely shift market dynamics. A quick examination of the issue reveals three main axes of influence that will play a major role in the success, or failure, of content providers working outside the carrier’s “walled garden”: Knowledge, Marketing, and Power.
Knowledge, particularly of the customer and his/her preferences, is power, especially in the context of a content provider entering the wireless market. Wireless operators, being well-equipped with proven expertise in implementing new content services, can easily setup and deliver new wireless services as a matter of course. Given that wireless operators have established billing and subscription management systems as well as a solid understanding of subscriber habits and technological capabilities, partnering with them is a logical option. On the other hand, if a content provider can circumvent the wireless operator, the company will retain a larger portion of the revenue stream. More importantly, content providers will own the relationship with the customer – a benefit that pays significant dividends.
The ability to effectively market a new content service will also be key. Both wireless operators and content providers bring powerful tools to the market. Carriers can offer advantageous placement and in-store, point-of-sale advertising for new services. Content providers, meanwhile, can leverage clear tie-in’s between actual show properties and their in-house mobile counterparts. ESPN utilizes its television and web properties, for example, to prominently and consistently advertise its new Mobile Virtual Network Operator (MVNO), mobile ESPN.
Then there is the question of leverage and the power that comes with it. In the current wireless ecosystem, content cannot live without a distribution network, and a distribution network cannot live without content flowing through it. However, as the distribution network matures and becomes established, content becomes the differentiating factor. As wireless technology matures and a culture of data consumption becomes established, the role and relative power of the wireless operator becomes a question that is open for review.
CBS’ move is clearly just the beginning of what will surely prove an interesting and high-stakes chess match. Content providers are accelerating their entrance into the wireless world, while wireless operators continue to make significant strides in developing exciting new services. With price, technology, and bandwidth barriers becoming less of a hindrance, IDC expects more collision ahead between content providers and wireless operators, producing a variety of innovative business and usage models that may forever change the wireless market.
Regardless of the evolutions that may occur in the relationship between wireless operators and content providers, handset vendors should remain a critical aspect of the wireless ecosystem. With core capabilities such as displays, processors, and storage increasing, the mobile phone remains a necessary component of present and future content distribution networks. Indeed, whether content providers integrate themselves into a carrier’s offerings, sit outside the walled garden, or create their own MVNO, handset vendors may soon find in content providers a new partner and ally.
Please contact IDC Technical Support for the following regions with any questions about our research.
February 27, 2006 at 5:50 pm
Thanks for the great info that everyone expressed at our New Media course. Let’s keep in touch and be supporters of each other.
February 27, 2006 at 10:31 pm
Doc Number: lcUS20076306
CBS Launches Mobile Content – A Shift in Carrier Relations?
As reported today by MarketWatch, CBS. Corp. is launching a wireless subscription service that will offer users video-enhanced breaking news and entertainment alerts direct to a subscriber’s mobile phone. This service, which will offer “CBS News to Go” and “ET [Entertainment Tonight] To Go,” will be available in text, picture, and/or video format, depending on the subscription and the capability of the subscriber’s phone. What caught my eye, however, was that CBS has not partnered with a wireless operator in order to distribute its content. Unlike companies such as News Corp. subsidiary Fox Mobile Entertainment and its content distribution partnership with Cingular Wireless L.L.C and T-Mobile USA Inc., users interested in CBS’ new service will work directly with CBS to subscribe.
In fact, this aspect of the announcement is what sets CBS apart from a number of its competitors. The move to the mobile world is nothing new for major content providers – indeed, NBC, News Corp., and even MTV produce a number of mobile offerings. Additionally, CBS already reaches multiple platforms by offering video-on-demand in partnership with Comcast as well as shows for purchase online through Google Video and Apple iTunes.
Abstracting this to a general level, this concept provides the framework for an interesting discussion on the future relationship of wireless operators to content players. While carriers today maintain significant control by virtue of their position in the wireless ecosystem, the entrance of major content providers – companies accustomed to leveraging their content – has the potential to severely shift market dynamics. A quick examination of the issue reveals three main axes of influence that will play a major role in the success, or failure, of content providers working outside the carrier’s “walled garden”: Knowledge, Marketing, and Power.
Knowledge, particularly of the customer and his/her preferences, is power, especially in the context of a content provider entering the wireless market. Wireless operators, being well-equipped with proven expertise in implementing new content services, can easily setup and deliver new wireless services as a matter of course. Given that wireless operators have established billing and subscription management systems as well as a solid understanding of subscriber habits and technological capabilities, partnering with them is a logical option. On the other hand, if a content provider can circumvent the wireless operator, the company will retain a larger portion of the revenue stream. More importantly, content providers will own the relationship with the customer – a benefit that pays significant dividends.
The ability to effectively market a new content service will also be key. Both wireless operators and content providers bring powerful tools to the market. Carriers can offer advantageous placement and in-store, point-of-sale advertising for new services. Content providers, meanwhile, can leverage clear tie-in’s between actual show properties and their in-house mobile counterparts. ESPN utilizes its television and web properties, for example, to prominently and consistently advertise its new Mobile Virtual Network Operator (MVNO), mobile ESPN.
Then there is the question of leverage and the power that comes with it. In the current wireless ecosystem, content cannot live without a distribution network, and a distribution network cannot live without content flowing through it. However, as the distribution network matures and becomes established, content becomes the differentiating factor. As wireless technology matures and a culture of data consumption becomes established, the role and relative power of the wireless operator becomes a question that is open for review.
CBS’ move is clearly just the beginning of what will surely prove an interesting and high-stakes chess match. Content providers are accelerating their entrance into the wireless world, while wireless operators continue to make significant strides in developing exciting new services. With price, technology, and bandwidth barriers becoming less of a hindrance, IDC expects more collision ahead between content providers and wireless operators, producing a variety of innovative business and usage models that may forever change the wireless market.
Regardless of the evolutions that may occur in the relationship between wireless operators and content providers, handset vendors should remain a critical aspect of the wireless ecosystem. With core capabilities such as displays, processors, and storage increasing, the mobile phone remains a necessary component of present and future content distribution networks. Indeed, whether content providers integrate themselves into a carrier’s offerings, sit outside the walled garden, or create their own MVNO, handset vendors may soon find in content providers a new partner and ally.
Please contact IDC Technical Support for the following regions with any questions about our research.
February 28, 2006 at 9:28 am
One site that has many technology blogs that I find very reliable (because I know the author to be a true academic) is Michael Geist’s website. I get most of my tech info from him. His website is located at http://www.michaelgeist.ca/index.php?option=com_content&task=view&id=1029&Itemid=89
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