A new industry structure is about to burst onto the scene. The growing ties between wireless and wireline services portend an imminent convergenceand, yes, possible clashof the titans of the telecommunications and media industries. The result will be telemedia, a new market that blends services from both camps. Television and cell phones. Music and Internet. Newly reconfigured companies, such as Time Warner, will have a profound impact in forging a new industry.
The dividing line between telecommunications and media industries isn't as clear as it once was. And before long, it could disappear altogether. Media companies are pushing into ground long held by telecommunications companies-and the telecoms are pushing into all forms of media. The result? A new world order dominated by two groups of powerhouses. On one side, the new telemedia titans and, on the other, re-energized RBOCs (Regional Bell Operating Companies) that offer a host of new entertainment services.
Faced with these drivers, savvy media companies will enter wireless initially as Mobile Virtual Network Operators (MVNOs). Many agreements are already in the works. Companies purchase the raw materials (airtime minutes, bits and bytes for data services) from carriers and then create new and differentiated products featuring their own brand, packaging and content. But the value of MVNO deals will be fleeting. In the long-term, media companies must develop deeper relationships with one or more non-RBOC wireless carrier that will ultimately lead to a full acquisition.
In contrast, RBOCs have been immersed in all things telephony, paying relatively little attention to these crucial home-based services. They also tend to offer generic rather than local content and have not entered into deep media relationships. But they are targeting geographic markets-in part to gain access into homes-which is going to be increasingly important. |
