The telecom industry is often an echo chamber, and right now many of the echoes consist of defeatist rhetoric regarding the threat from OTT players.
It’s smart business to pay attention to one’s competition and to take steps to overcome it. But the characterization of OTT as a competitive threat is misleading. OTT is a business model. It may be embraced by aggressive competitors, but those companies are the threats – not the business model as a whole.
Do companies like Netflix and Skype pose competitive threats to Pay TV and voice offerings, respectively? Obviously they do. But there’s an inherent opportunity in their approaches that telecoms ought not overlook.
I’ve been talking to clients and colleagues for more than 10 years about the idea that telecom and cable operators should not limit their concept of the customer to their own network footprints (If you don’t believe me, ask Craig Bachmann – we wrote a paper about this in 2000 for BusinessEdge Solutions). In a virtual goods business, like digital content, what’s important is the customer relationship and experience, not who owns the pipe.
Verizon <a href=”http://gigaom.com/video/verizon-ott/”>seems to understand this</a> and is taking initial steps to offer subscription video OTT. Anyone that’s in the TV Everywhere game should start thinking about the same kinds of models; don’t just authenticate a Pay TV subscription customer – sell that awesome, on-demand, TV Everywhere capability to anyone with a broadband connection, regardless of who offers the broadband.
From a billing perspective, if you’re still in a situation where your biller can’t define a customer without some kind of physical address or network endpoint, then you ought to saunter over to your Stutz and revulcanize its tires, post haste.
Less dramatically, let’s just say that any billing model needs to recognize that a customer:
a) is an individual, or group of individuals
b) will want to pay for service in many different ways
c) wants to push a button and just have stuff work
d) wants billing detail they can understand
e) may not have a home phone number or an address that isn’t a PO Box
f) may not live anywhere near your network footprint
g) exhibits behaviors that should be measured, analyzed, and catered to
Billing should not be a barrier to winning customers outside of the network footprint. It should be an enabler to help telecoms capitalize on OTT and related business models.
Let’s drop the defeatist attitudes. OTT isn’t nearly as much of a threat as it is a massive opportunity for telecoms to continue to be among the wealthiest and most profitable companies on the planet.