Build or Buy – Industry Observations from Head of Global Channel & Strategic Alliances
About to celebrate 5 years in the industry and then this!
My observations on the dynamic industry we serve and why things, for some, may never be the same again.
Transitioning from the international Mobile Telco, Value Added Services Sector in 2015 to Media…Publishing, TV, Broadcast, OTT, Sport…was a big change for me. I thought I had a lot of contacts in different markets in the Mobile infrastructure industry but then quickly learned that the media and entertainment industry is massively fragmented and I knew nobody! The key industry networking events such as IBC and NAB, supported by a whole host of regional events gave me an opportunity to rapidly get engaged with key Technology and Business leaders in the industry. After 5 years, I’m still only scratching the surface but am now reasonably connected in this exciting industry where there is never a dull moment.
I don’t need to state the obvious, in terms of the challenges we face right now on a global scale but feel that collectively, unlike many other sectors of industry, we are very well prepared to sustain our businesses at this difficult time. Well prepared, in terms of our general ability to remotely deliver both software and services securely in the cloud, at speed and quality.
One thing is for sure, something I have heard many press and government commentators say recently, ‘things may never be the same again’. Of course, quite what will never be the same, is open for discussion depending on where you sit in industry; supply chain priorities; attitudes to home working; health and social provision models; enhanced recognition of job roles; business and domestic travel habits; international collaboration etc.
Crisis Accelerating Change in the Media Industry
In the media industry and specifically in my/MPP Global’s world of content monetisation via the deployment of SaaS based subscription and transaction based models, change was already on the way and is only being accelerated by the pandemic. We’ve been talking about disruption, consolidation, aggregation for some time. We’ve been observing some very interesting acquisitions largely aimed at achieving more end-to-end capability in the case of the vendors and more influence and reach over international subscriber communities, in the case of the service providers.
We’ve also witnessed the rise of new OTT entrants, with the battle of the international brand and content owners, such as Disney+, AppleTV+, Amazon Prime Video providing alternative services to Netflix and other international service providers with many more to come such as Peacock from NBCUniversal who are trying to accelerate global market launch. In some cases this has lead to the most unlikely of commercial partnerships, such as our own MPP Global Client, NOW TV (SKY) selling Netflix and hayu./NBC Universal content.
Live and SVOD sport has clearly been badly affected by the pandemic but we are helping our clients improvise and vary their offering through some excellent marketing of archive content, combined with fantastic efforts to maintain their customer base via configurable subscription offers such as variable pricing, pause, credits, holidays, extended entitlements etc.
Has the Crisis Damaged Companies’ Ability To Act?
Such is the demand for the return of live sports action for example, that the companies affected will see an immediate and dramatic demand surge for their subscription services once lockdown is relaxed country by country.
These companies certainly better be ready for the surge in demand but as with the wider media & entertainment industry, they may have been affected more widely by the effects of the pandemic, not in terms of viewer behaviours but in terms of their structure and staffing.
And Effects of Vendor Consolidation…
As I mentioned earlier, on the vendor side we are seeing consolidation in the market with several specialist or best of breed vendors acquiring another to offer a one stop shop type of service to their clients. I know from experience that any acquisition always involves a period of company integration, rationalisation of some functions and on-going let’s say, ‘platform discussions’ among competing internal product management teams, some of which can be detrimental to the very objectives the company was trying to achieve through the acquisition.
Compared to End to End Tech Vendors…
Compare with similar, well established tech vendors who have offered end to end services over many years but inevitably, their focus and resources cannot be equally allocated across all the stages of the consumer services they offer. The result? A natural tendency to put resources in the places where they have core competence. They run the risk of continuing to offer the end to end service rendering their clients un-competitive in some key areas of the subscriber experience.
Compared to Build vs Buy…
The $1.5bn Disney/BAMTECH is not typical for the industry; this was a hugely expensive acquisition backed by a long term strategy to monetise one of the world’s leading brands and its content via investment in a very well established tech company as a means of launching a global OTT service. The subscriber numbers are now mouth watering and congratulations to Disney for taking such a risk in 2017.
Conversely, unlike resource rich Disney, those service providers who have decided to ‘build’ rather than ‘buy’ some of the critical elements of the service delivery chain, have had to choose where to allocate their resources. This is particularly true now and even before the pandemic when the dynamic nature of the industry, may well have lead to yesterday’s decision to build in house suddenly being compromised by a changing competitive landscape and an urgent need to allocate increasingly scarce resources elsewhere in the business.
Enforced, Scarce Resources…
I say ‘scarce resources’ as I know many service providers who have employed a significant number of developers and other software delivery professionals on a contract basis, rather than full time employees, have had to take the very uncomfortable decision to reduce staff costs at this time – a situation which may well fall into the ‘things may never be the same again’ category. Business continuity to support existing ‘Product’ offerings may well be at risk due to a shortage of specialist staff with the specific skills sets required to maintain existing, in-house developed products.
…And Best of Breed Solutions – No Apologies For The Sales Pitch!
For such service providers, the fact that natively digital companies such as MPP Global have grown independently and organically, focusing 100% on our target media clients and their subscriber audiences, will be reassuring. Our eSuite platform is largely developed by the requirements and needs of our media clients themselves in (and its worth repeating) the sectors we serve; Publishing, TV/Broadcast OTT, Sport and emerging…Telco.
The dynamic sector we serve has also seen changes in how we help our clients manage their subscriber journeys, acquired directly via traditional credit/debit card, bank transfer or indirectly via a plethora of IN-APP purchase methods. We have also been busy ensuring we support various international, region and domestic alternative payment methods and more recently, subscriptions won via direct carrier billing relationships with Telcos.
I Hope One Thing Does Not Change In The Future…
Even in the current, incredibly challenging circumstances, the world of media & entertainment is very much open for business. We feel privileged but proud to be in a position to help our existing clients retain and grow their existing subscribers base, take current projects LIVE and continue to win new clients together with our partners.
We are perfectly capable of executing these projects remotely for the time being but…I am really looking forward to the moment when we can celebrate success together in person. I hope some things will never change 😊
These are my personal thoughts – I’d be very interested to hear yours.
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