It doesn’t seem that long since owning networks was the very unfashionable, potentially less profitable and, frankly, dead boring end of the business. Commoditisation of bandwidth provision and the obligations of neutrality both put pressure on pipe owners and many looked enviously at their content cousins. Some pipes bought content – Comcast and NBCU – some content owners shed their pipes – Time Warner and TWC.
Now pipes are all the rage once more. Not so much for the old-fashioned vertical integration of content and cables, more a target for those who fancy they have expertise in content management and marketing but who realise that time may be running out for their current platform; see Dish’s bid for Sprint Nextel. Or it’s about those who have domination in many markets in one platform but feel exposed to smaller rivals who have more cards in their hands to cross sell; see Vodafone’s interest in KDG.
The point is, if you don’t have creative assets to your name – programme rights, programme production, video games etc – then you are a commodity provider and, therefore, you must be able to provide convenience, ubiquity, efficiency and price competiveness. If you have enough scale across enough platforms in enough markets you will be able to access the content, either because the owners can’t afford to deny it to your customers – and therefore will do a wholesale deal – or because owners have made their content available ‘on the shelf’ and your platforms are the best/easiest/cheapest way to reach it and consume it with.
But to achieve customer scale, cost efficiencies and marketing crossover you need to own hard wire and mobile. No one thinks anymore that 4G or even 4.5 will be used to deliver content to the home, and while dishes will do for now, the future belongs to pipes – ultimately glass ones. Equally, no one now thinks having a mobile dimension to your media offering is merely optional.
The biggest and best players have both or are seeking to have both. The markets are vast and the players are huge and established, and most will have to settle for what they can get where they can get it, one platform and one territory at a time. And many will look back and wonder how they let passed opportunities slip by: what would BT give not to have sold off 02 when it did, and how much must Vodafone regret turning away from being an ISP?