Making money from multiscreen
Posted on June 17, 2013 by Farah Jifri
As smart devices (tablets, smartphones, etc.) become ubiquitous, broadcasters are keen to capitalise on the small screen as an adjunct to the large. This is all well and good, and there are some very nifty bits of tech out there that will help them do this. However, the issue of how to make money out of second-screen services in the long term remains slightly hazy.
The evolution of streaming music services in the telco space could offer some answers. First there were online subscription music streaming services Spotify and Deezer in France, which as smartphones took off, made their way into the mobile space, offering app-based access to music on the go.
Several telcos and mobile operators soon tried to muscle in on the streaming music action – with varying rates of success. Vodafone Music, for example, is far from a household name. But it wasn’t all doom and gloom. Danish incumbent TDC was among the first to provide an own-brand music streaming service (TDC PLAY) free to voice (fixed and mobile), broadband and pay-TV customers – and more importantly to make a success of it. TDC attributed a 50% reduction in churn for broadband customers to its provision of PLAY, which more than justified the cost of running the service and investing in music rights. Portuguese incumbent TMN’s MusicBox service, bundled free to its broadband, telco and mobile customers, was also one of the more successful projects in this space. The operator now provides MusicBox as a standalone service which non-TMN customers can subscribe to – allowing it to monetise what has long been a free value-added service (VAS).
While some telcos decided that an own-brand music streaming service was the way to go, others sought to partner with a third-party. 3 led the way in this approach, partnering with Spotify – initially in Sweden and then in the UK and other markets – to offer the music service at a discounted rate as a value-add. Orange followed suit, partnering with (and acquiring a stake in) Deezer, which is now available at a reduced price to customers in most of its markets.
As the small screen becomes as important for accessing content of all types as the large one, the question of how to actually make money from these services is very much front of mind. Those broadcasters looking to get in on the second-screen action could do a lot worse than look to the example of how telcos have exploited streaming music as a VAS. Sports would be the ideal genre to act as a test bed to gauge if consumers will actually reach into their wallets for second-screen content.
Most sports broadcasters – Sky Sports, ESPN and Canal+ to name a few – already have companion apps, where they provide additional content such as live stats, aggregated Twitter feeds, highlights, live video streams and so on. At the moment these app-based content services are provided free to subscribers and used as a means of creating differentiation and stickiness.
The next logical step would be to operate a ‘freemium’ model where the basic service is offered for free, but additional premium content is paid for. TMN’s offer of MusicBox to non-customers is another option which would allow broadcasters to make money from a service they currently provide free of charge.
Once sports rights are broken up into TV and second screen – instead of lumping it all together – the issue of monetising second screen content will become much more pertinent. Broadcasters that already have second screen services up and running will be best placed to do this.Leave a comment