Telco's Secret Weapon In The OTT Battle: Fans, Fans, And More Fans!

Lise Tcheng and Francis Cepero

As all telecommunications companies are keenly aware, the days of selling just voice are over. Now, it’s all about selling digital services that are data-driven. While this is readily apparent to most telcos, what is not clear is the path of transformation they must take to reengineer their businesses – and this is causing a costly stagnation for many.

To reignite revenue streams, it’s time to get a little creative – and there’s one obvious place where telcos can look for inspiration. They need to take a look at their nemeses – yes, the over-the-top (OTT) players who have created great success with the offer of rich content and digitization – and start thinking like they do!

The OTT players understand how to monetize connectivity, which used to be the primary competitive advantage of the telcos. Now, however, the OTTs have found a way to capitalize on the infrastructures that telcos have so painstakingly built – and they’re doing it for cheap money! They are successfully offering content and related connectivity-based services that people really want, with the payoff of revenues three or four times greater than what the telcos are generating for network usage.

It’s time for telcos to take action – and to start thinking like the OTT players who have outsmarted them to date.

Start playing the OTT game

Where are OTT players finding success? One simple answer is in communities – big communities, such as fan bases. After all, everyone is a fan of something, right? And typically people are fans of many things, with many unfulfilled dreams, and they share their interests with many other people who are as fanatical as they are!

Some groups of fans number into the millions – like the European football club, Manchester United, which has a reported 670 million supporters around the globe. Cristiano Ronaldo, who plays football for Spanish club Real Madrid and the Portugal national team, has over 117 million likes on Facebook (with what might be the largest group of followers on the site). He also has over 40 million Twitter followers. That’s a lot fans!  And fans like these are typically dedicated people who have unfulfilled needs and they crave a better, never-ending fan experience.

Telcos are in a perfect position to deliver on these needs, as they can create new kinds of fan-driven services by owning content distribution rights and providing related offerings that are exclusive to their networks.

No longer dependent on voice, telcos now become full-fledged digital service providers who can introduce monetized offerings to new – or existing – groups of customers that become loyal subscribers.

Fan-based sponsorship is a big opportunity!

The fastest way to deliver fan-driven services is through sponsorships, which could open the door to untold new revenue streams for telcos.

The worldwide forecast for global sponsorship spending is expected to top $60.2 billion in 2016. Many of the largest telcos are already heavily entrenched in this type of investment. For instance, in the United States alone, the estimated 2015 sponsorship spend from the top seven telco companies was between $490 and $525 million.

AT& T is the telco leader on that list, and it also ranks fifth in all categories of sponsorship. That ranking most likely will rise even higher as its plans to acquire Time Warner come to fruition.

The company has mastered the art of digitizing venues, connecting fans, and capitalizing on the interest of hundreds of thousands of people. For instance, as the official wireless provider for Walt Disney World and Disneyland Resort, AT&T gained extensive marketing and branding opportunities that reach over 50 million people each year.

Another interesting sponsorship that reaches millions of people is through the naming rights to the stadium which is home to the Dallas Cowboys football team and many other sports and entertainment events. As part of its agreement with the Cowboys, AT&T delivers interactive game-day experiences for the team’s fans over what AT&T says might be “the hardest-working air on the planet.”

For instance, there are, of course, extensive offerings on an AT&T Stadium app. AT&T has also erected a massive 1.2 million pound Jumbotron screen that focuses on the events held in the stadium. And recently, the stadium added 40 LED panels, which robotically rotate 360 degrees and make up a 130-foot video board. The panels are dubbed “fan screens” because they all focus on the fans, rather than events.

AT&T is just one of many telcos that are already creating outside-the-box opportunities that are now critical to the future of telcos. 

Where to find fans? Everywhere!

The obvious areas for sponsorship opportunities are sports and entertainment fans, but there are many other large-numbered fan bases. For instance, think tourist attractions, like the Grand Bazaar in Istanbul, which gets more than 90 million visitors a year. There is a Grand Bazaar app that promises to offer a history of the bazaar, as well as maps, services, reviews, and planning information – everything that is needed before, during, and after a visit.

Another example of large communities are festivals such as TomorrowLand, or mega events, like the upcoming Expo 2020 in Dubai, which expects more than 25 million visitors over the course of the event. Etisalat has already capitalized on the Dubai opportunity and it now has global rights as Expo’s Official Telecommunications and Digital Services Partner. The company will provide connectivity and Wi-Fi for up to 300,000 people on site a day.

An opportunity that never ends

The beauty of the fan experience is that it is not a “one-and-done” opportunity based on a single event. It quickly can turn into a 365-day engagement that creates a loyal base of emotionally charged supporters that want more and more content. Telcos can create these never-ending opportunities naturally at a low cost because they own the infrastructure.

Add in data collection and fan-centric customized services and telcos now have a triple-play advantage that will differentiate them in the long term as they build loyalty. This advantage will transform them from being “dumb pipe” providers to full digital service providers who can capitalize on new innovative revenue streams – just like the OTT players are doing today.

Partner up and knock the OTTs out of the game

Delivering these new, compelling revenue streams is not something telcos are used to doing. Therefore, to start to play competitively against the OTT players will require a little bit of innovative thinking around creative business models and the use of trusted partnerships.

For instance, the right kind of technology is a key cornerstone for creating highly desired fan experiences. Telcos can use their networks in combination with a customer-centric platform to develop a new business model that allows them to mediate interaction between fans, what they are a fan of, and their mobile devices.

Telcos can distribute and monetize content through programs that are driven by segmentation and customizable campaign execution capabilities. With a powerful digital and consumer engagement model, telcos can use data-driven solutions to monitor and analyze data to create an optimal fan experience, retain fans’ loyalty, and acquire new fans or subscribers. From a financial perspective, sponsorships also give telcos the opportunity to shift subscribers from prepaid to postpaid, especially in fast-growth markets.

Not only will telcos have the opportunity to build loyalty among current subscribers, but they can also capture new customers through proprietary content only offered through them. They simply have to set up services, create an exclusive rights app, invite people to join the network, and start collecting data.

This puts telcos back in the driver’s seat, as they become the ones that drive the conversations and create loyalty among the fan base.

It’s about time, isn’t it? Step up the plate, telcos, and starting building your fan base!

For more on strategies to turn customers into fans, see Customer Communities 101: A Beginner’s Guide For Marketers.