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Home > Market Research > Media & Entertainment > Beyond Triple Play: Value added services for broadband operators :: Informa Telecoms & Media
Download your extract from Beyond Triple Play here.
Beyond Triple Play assess the different opportunities broadband operators have in offering services beyond the core triple play offer of telephony, TV and broadband. Many have launched home monitoring or digital storage services, or moved into content with online music, games, or video. A few have tried to harness their large audiences by developing online community or UGC offerings. And some are trying to take greater advantage of their core assets, such as directories, and bring them into the broadband era.
Yet many of these service areas are not without problems. Huge global players dominate much of the online content world, and displacing them will be no easy task. Some services are also unproven in terms of their popularity with the consumer and their revenue models. And some operators are finding that they are not well placed to provide these services, in terms of how their business is structured and how they are perceived in the mind of the consumer.
Beyond Triple Play reviews the services landscape and assess where the greatest opportunities lie for operators. Which services are operators best placed to offer? Where will they face the greatest competition? What assets do different operators have to enable them to make these service plays? Which services can be used to reduce churn and which can increase ARPU? And where should operators look to make future service plays beyond those that are typically offered today?
Key Coverage
- Evaluate the different types of services that operators across the globe are launching
- Benchmark your service strategy and performance against that of your peers
- See which services are best for driving revenue, reducing churn and aiding the up-sale of an operator's core products
- Asses the threat of services from third party and over-the-top players
Market Data
A comprehensive, global breakdown of fixed-line operator value-added services offerings, including a quantitative analysis of service offerings by type, sector, country and operator type.
Informa’s broadband value-added services scorecard. Ten of the most important types of service were evaluated, measured and benchmarked based on the benefits they can bring to an operator and the strengths and opportunities an operator has in offering it.
Key Issues Addressed
- Which services are operators best placed to offer?
- Where will they face the greatest competition?
- What assets can operators exploit in order to successfully offer services
- Which services can be used to reduce churn and which can increase ARPU?
- Where should operators look to make future service plays beyond those that they offer today?
Authors
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Table of Contents
C H A P T E R 1
E X E C U T I V E S U M M A R Y . . 1
Figure 1.1: Operator value-added service stages . . 1
Figure 1.2: Operator service strategy segmentation 2
Services scorecard . 2
Figure 1.3: Value-added services scorecard top-line results . 4
Recommendations and value-added services in the future 4
C H A P T E R 2
V A L U E - A D D E D S E R V I C E S L A N D S C A P E 7
Core service problems 7
Fixed-voice: Access lines and subscribers in decline . . 7
Figure 2.1: Europe, fixed-voice subscriptions in selected markets, 1Q04-1Q09 . 8
Figure 2.2: Global, top 25 service providers by VoIP subscriptions, 2008 . . 8
Broadband: Saturation and price competition . 9
Figure 2.3: Global, broadband subscriptions and net additions, 1Q04-1Q09 . 9
Figure 2.4: Europe, broadband subscriptions and net additions, 1Q04-1Q09 10
Figure 2.5: UK, selected BT broadband packages, 2003-2009 . . 10
TV: Potential, but path to growth may be difficult . . 11
Figure 2.6: Global, multichannel TV subscriptions by technology, 4Q05-4Q08 . . 11
The path to offering value-added services 12
Stage one: Single play . 12
Stage two: Dual play 12
Stage three: Triple play . 12
Stage four: Multi play . . 12
Figure 2.7: Operator value-added service stages . 13
Segmenting the operator value-added services landscape . 13
1) Communications services 13
2) Enabling services 13
3) TV enhancements 14
4) Content services . 14
5) Web 2.0 and community services . 14
Figure 2.8: Operator value-added services segmentation . 14
Operator service strategies 15
Figure 2.9: Global, selected operators, monthly top-tier online storage cost as a percentage of monthly
top-tier broadband cost, Sep-09 . 15
Narrow service range, lower cost 16
Broad service range, lower cost 16
Narrow service range, higher cost . . 17
Broad service range, higher cost 17
Figure 2.10: Operator service strategy segmentation . 18
C H A P T E R 3
V A L U E - A D D E D S E R V I C E S S C O R E C A R D A N D A N A LY S I S 19
Methodology . 19
Scorecard criteria and weighting 20
Scoring . 20
Top-line scorecard results . 21
Figure 3.1: Value-added services scorecard top-line results 22
Figure 3.2: Informa value-added service scorecard 23
Detailed scorecard results by service . 25
Music: subscriptions 25
Figure 3.3: Music: subscriptions, detailed scorecard breakdown . . 26
Figure 3.4: Music subscriptions, detailed scorecard results 26
Online storage . . 27
Figure 3.5: Europe, potential monthly revenues from online storage, selected operators, 2Q08 . 27
Figure 3.6: Online storage, detailed scorecard breakdown 28
Figure 3.7: Online storage, detailed scorecard results . 29
Games: subscriptions . . 29
Figure 3.8: Example operator benefits from a games subscription service . 30
Figure 3.9: Potential monthly revenue and ARPU uplift from games subscription service, May-09 30
Figure 3.10: Games: subscriptions, detailed scorecard breakdown . 31
Figure 3.11: Games: subscriptions, detailed scorecard results . 32
Home monitoring 32
Figure 3.12: Home monitoring, detailed scorecard breakdown 33
Figure 3.13: Home monitoring, detailed scorecard results 34
Web portals . 34
Figure 3.14: Web portals, detailed scorecard breakdown . 35
Figure 3.15: Web portals, detailed scorecard results . . 36
Video: Web TV . . 36
Figure 3.16: Video: Web TV, detailed scorecard breakdown . . 37
Figure 3.17: Video: Web TV, detailed scorecard results . . 38
Games: a-la-carte . . 38
Figure 3.18: Games: a-la-carte, detailed scorecard breakdown 39
Figure 3.19: Games: a-la-carte, detailed scorecard results 39
Video: Paid online VoD . . 40
Figure 3.20 Factors determining consumer willingness to pay for operator video services . . 40
Figure 3.21: Video: Paid online VoD, detailed scorecard breakdown . 41
Figure 3.22: Video: Paid online VoD, detailed scorecard results . . 41
Social networks . 42
Figure 3.23: Social networks, detailed scorecard breakdown . 42
Figure 3.24: Social networks, detailed scorecard results . . 43
A-la-carte music 43
Figure 3.25: Music: a-la-carte, detailed scorecard breakdown 44
Figure 3.26: Music: a-la-carte, detailed scorecard results . 44
C H A P T E R 4
W E B P O R T A L S 45
Figure 4.1: Global, top 10 Web sites by visitors, Aug-09 . 45
Operator services 45
Figure 4.2: Typical operator portal offerings . 46
Figure 4.3: Domestic monthly reach of selected operator portals, Dec-08 . 47
Figure 4.4: Europe, top five most popular Web sites by reach in selected countries, Dec-08 47
Rival offerings 47
Figure 4.5: Selected Web portals and launch dates . . 48
Operator strategies . . 48
Outsourcing 48
Premium content . . 48
Community-focused . 49
Team up 49
Figure 4.6: AD Europe operator membership 49
Operator advantages 50
National champions and existing subscriber base . . 50
Scale, and some room for targeting . 50
A safe bet . 50
A cheaper option 50
Operator disadvantages 50
A small advertising pie, even in advanced markets . . 50
Figure 4.7: Europe, online ad spend per Internet user in the big five markets, 2008 . . 51
Figure 4.8: UK online display advertising spend, 1H08 52
Winning over non-subscribers . . 52
Mobile advantage overplayed 53
Figure 4.9: Global mobile advertising expenditure, 2008-2013 . 53
Case studies . 53
FastWeb 53
Figure 4.10: Italy, operators’ share of the broadband market, 1Q09 . 54
Virgin Media . . 55
Figure 4.11: Virgin Media portal strategy . . 55
C H A P T E R 5
S O C I A L N E T W O R K S A N D O N L I N E C O M M U N I T I E S 57
Figure 5.1: EU, percentage of users that visit the following types of sites, Oct-08 . . 57
Operator services 57
Figure 5.2: Selected operator social networks and online community services, Sep-09 . 58
Rival offerings 59
Figure 5.3: Europe, Facebook’s rank in the social networking category, selected countries, Feb-09 . . 59
Operator strategies . . 60
Niche interests . 60
Social network aggregators . 60
Work with existing players . . 61
Operator advantages 61
Operator disadvantages . 61
Late to the party 61
National focus . . 61
Mobile advantage . . 62
Figure 5.4: Europe, number of Facebook “fans” of selected operators, Jul-09 . . 62
Case studies . 62
Cyworld, South Korea 62
Figure 5.5: South Korea, SK Telecom’s community (Cyworld) revenues, 4Q06-2Q09 . 63
Figure 5.6: South Korea, Cyworld statistics, Aug-09 . 63
BT, UK . . 64
Figure 5.7: UK, key findings from BT’s The Voice of Small Business report, 2009 65
C H A P T E R 6
O N L I N E M U S I C . . 67
Figure 6.1: Global, total value of digital music market, 2004-2008 . 67
Figure 6.2: Global, digital music revenue, by region, 2008 . 68
Operator services 68
Figure 6.3: South Korea, leading music retailers, 2008 . . 69
Rival offerings 69
Figure 6.4: Selected broadband operator music services, Sep-09 . . 70
Operator strategies . 73
Competing head-on with iTunes . 73
Third-party partnerships . . 73
Link with mobile offerings . . 74
Subsidizing music to reduce churn . 74
Answering regulatory questions . 74
Operator advantages 75
A scale game . . 75
Consumers see operators as music providers 75
Figure 6.5: UK, key findings of Playlouder MSP survey . 76
First-mover advantage in subscriptions . 76
Operator disadvantages . 76
Displacing iTunes . . 76
The problem of maintaining exclusivity . . 76
Case studies . 77
O2, Czech Republic 77
Figure 6.6: Czech Republic, publishers’ share of music market, Apr-09 77
Potential benefits . . 78
Figure 6.7: Czech Republic, Internet advertising expenditure, 2008 . 78
Initial reception and future success 78
Figure 6.8: Czech Republic, leading entertainment Web sites by daily unique users, Feb-09 . . 79
TDC Play 80
Figure 6.9: Western Europe, top 10 markets by broadband penetration, 1Q09 80
Early success . 80
Virgin Media . . 81
C H A P T E R 7
Online video . 83
Figure 7.1: Selected markets, percentage of Internet users who view long- and short-form online content,
2008 . . 83
Figure 7.2: Global, growth of online video traffic, 2008-2013 . . 84
Operator services 84
Figure 7.3: Selected broadband operator video services, Sep-09 . . 85
Rival offerings 87
Figure 7.4: US, online video metrics, Nov-08 . . 87
Figure 7.5: Online TV and video competitive landscape . 88
Operator strategies . 88
Using Web TV to bolster TV and online content offerings . 88
Figure 7.6: Cablecom live TV key facts . 89
Extending TV VoD online 89
Paid-for vs. free content 90
Figure 7.7: TV and broadband market shares of selected cable operators, end-08 . 90
Figure 7.8: Sky Player monthly subscription charges for non-TV subscribers, May-09 . 90
Web TV as a low-effort add-on . 91
Operators focusing on the TV . . 91
Figure 7.9: Factors determining consumer willingness to pay for operator video services 92
Operator advantages 93
Beating broadcasters to the punch . 93
Bolstering a weak TV offering 93
Cable’s legal and content strength . 94
Operator disadvantages 95
Previous failures . . 95
Striking deals can be tricky . 95
Cheap set-up means limited offering . . 95
Needs may already be filled . 95
Case studies . 96
ESPN 360, US . . 96
Figure 7.12: Change in market share of US operators carrying ESPN360, 2Q07-3Q08 . 97
TV scale, service cost discourage operator participation . 97
Figure 7.13: US, selected operator TV and broadband subscriptions, 3Q08 . . 98
Content providers balance online and TV offers . 98
Videoload Free, Germany 99
Figure 7.14: Germany, downloadable content sales and revenue, 2005-2008 100
Figure 7.15: Germany, online video services, Feb-09 101
TV Everywhere/OnDemand Online, US . . 102
C H A P T E R 8
O N L I N E G A M E S . 105
Figure 8.1: Consumer spending on video games in the “big five” European countries, 2007 . 105
Figure 8.2: US games sales, 1997-2007 . . 105
Operator services . 106
Rival offerings . . 106
Figure 8.3: Selected broadband operator games services, Sep-09 107
Figure 8.4: Oberon Media, selected gaming partners, Apr-09 . . 109
Figure 8.5: US, most popular free gaming sites by total unique monthly visitors, Dec-08 109
Operator strategies 109
Free and ad-funded 109
Subscription vs. download-to-own . 110
Figure 8.6: Cost of “Far Cry II” by platform and distribution method, Mar-09 110
Working with third parties . 110
Premium vs. non-premium 111
Figure 8.7: Worldwide release timeline for Assassin’s Creed, 2007-2008 . 112
Operator advantages . . 112
Owning the entry point and multiple sales channels 112
The billing relationship 113
Audience make-up 113
National champions . . 113
The distributor rules the value chain . . 113
Operator disadvantages . . 114
Non content-driven operators will struggle to sell premium titles 114
Crowded marketplace . 114
Case studies 114
TeliaSonera . . 114
Figure 8.8: NextGenTel gaming market segmentation . . 115
Figure 8.9: Cost of selected games on BroadParkGames and Steam . 116
Neuf/SFR . 116
Figure 8.10: Selected SFR value-added services . 117
Figure 8.11: European IPTV service launch dates, 2003-2006 . 117
C H A P T E R 9
H O M E M O N I T O R I N G A N D S E C U R I T Y . 121
Figure 9.1: Typical home monitoring set-up 121
Figure 9.2: Selected operator home monitoring services, Sep-09 122
Operator services . 122
Rival offerings . 123
Operator strategies 123
Figure 9.3: Europe, most important reasons for having a home-monitoring service in the “big five”
countries, 2006 124
Operator advantages . . 124
Undercutting the managed alarm players . . 124
A market without large global players . . 125
Resonance with the operator’s customer base . . 125
Operator disadvantages . . 125
Service closures indicate fundamental problems . . 125
Unreliable operators . . 125
Little advantage in owning the consumer’s DSL line 126
Services are going mobile . 126
Case studies 126
UPC, Hungary . 126
Figure 9.4: UPC Hungary Pay TV and broadband subscriptions, 1Q05-4Q08 . 128
Altibox, Norway 128
Figure 9.5: Europe, top 10 FTTx operators by subscription numbers, 4Q08 129
Xanboo, Global 130
Figure 9.6: Potential uses for home monitoring . 130
Figure 9.7: Xanboo customers by country . 131
C H A P T E R 1 0
O N L I N E S T O R A G E . . 133
Figure 10.1: Online storage as delivery method for other value added services 133
Operator services and opportunities . 134
Figure 10.2: Selected broadband operator online storage services, Sep-09 135
Rival offerings . . 137
Operator strategies . 138
A limited social network 138
The two-pronged approach 138
Orange meets LaCie halfway . . 138
Work with third parties 138
Operator advantages . . 139
Success in storage is a question of trust . . 139
Unrealized storage assets . 139
Bundling, cross-selling and upselling . 139
Heavy promotion . . 139
Operator disadvantages 140
C H A P T E R 1 1
O N L I N E P H O T O S E R V I C E S . 141
Figure 11.1: US, digital camera penetration of the adult population, 2006-2010 . . 141
Operator services and opportunities . 142
Figure 11.2: Selected broadband operator photo services, Sep-09 . . 143
Rival offerings . . 143
Figure 11.3: Global, online-photo competitive landscape, Jul-09 144
Operator strategies . 144
Free teaser offers . 144
Photo printing with third parties . . 144
Open photo-sharing platforms . 145
Integration with partner sites or third parties . . 145
Operator strengths . 145
A selling point for FTTx 145
Figure 11.4: Global, selected operators, minimum time taken to upload 100 photos, Jul-09 . 146
Figure 11.5: US, digital-camera sales by resolution, 2006-2008 146
Privacy and peace of mind . 146
Owning the big screen . 147
Operator weaknesses . . 147
A crowded marketplace 147
The mobile advantage is fading; the TV advantage may follow . 147
Figure 11.6: IPTV application models . 148
Figure 11.7: Yahoo connected-TV ecosystem 148
Limited value from third-party deals . . 149
Case studies 149
Scarlet, Netherlands . . 149
Figure 11.8: Netherlands, total online advertising market, 2005 - 2008 . . 150
Figure 11.9: Netherlands, selected providers’ online photo-sharing/storing services, May-09 . . 151
PCCW, Hong Kong . 151
Figure 11.10: Hong Kong, PCCW Snaap, key facts, Jul-09 152
C H A P T E R 1 2
S E R V I C E S A N D A P P L I C A T I O N S O V E R F T T X . . 153
Figure 12.1: Fixed broadband network architectures 153
Operator services to date . 153
Figure 12.2: Selected FTTH service offerings and strategies, Feb-09 155
Figure 12.3: Global broadband subscriptions and key service launches, 2000-2005 . 155
Future operator services . . 156
Figure 12.4: Future TV formats . . 156
3D TV . 157
Figure 12.5: Selected 3D TV developments, May-08 to Feb-09 . 157
Figure 12.6: Benchmark for likely future bandwidth use of the average FTTH household 158
Telehealth . 160
Cloud computing . . 161
Services over open access networks 162
C H A P T E R 1 3
R E C O M M E N D AT I O N S . . 165
Value remains in the mundane . 165
Content services must be subscription-based . . 165
Maximize the TV advantage, but don’t count on it lasting . . 165
Play on your conservative reputation… 166
… but avoid “me-too” services and consider thinking niche 167
Improve service sign-posting . 167
Bundle services more imaginatively 167
Focus on services for next-generation broadband . . 168
In the long run, act as service enablers and move up the value chain . . 168
A P P E N D I X 1
Value-added services scorecard factor definitions 169
A P P E N D I X 2
B R O A D B A N D O P E R AT O R V A L U E - A D D E D S E R V I C E S 171
Asia Pacific 172
Eastern Europe 178
Latin America 189
US/Canada . . 194
Western Europe 198
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