Bharti Airtel’s decision to shut down its music app Wynk and instead partner with Apple for such content, signals that the era of telecom operators getting into content business is over. Analysts said that it’s back to the basics — telcos acting as platforms, aggregating and bundling content offerings created by specialist platforms. Simply put, they continue to act as pipes, which deliver voice, data and content.
Ten years ago, Airtel was the first to start a standalone app with Wynk, which could be dowloaded by even non-Airtel users. Last week, when it was shut down, it had merely 100 million users compared to the telco’s 354 million mobile user base.After its launch in September 2016, Reliance Jio also ventured into launching services like JioCinema, JioChat and Jio Saavn but the number of users of any of these apps is nowhere closer to its mobile user base of 490 million. Just for context, while JioCinema has downloads of 100 million, Disney Hotstar’s downloads stand at 500 million.
While Jio may not have shut down any of its app, clearly consumers are not flocking to them. According to analysts, bundling and monetising is the way forward for telcos and standalone firms as this benefits both parties.
For instance, Apple gets a large Airtel user base to expand its reach in India as its share in the devices market is only 5% against 95% of Android. For Airtel, its huge Android base users get to view Apple’s content which has a strong brand value. “There will be lots of innovation on pricing and bundling going forward,” Ashish Pherwani, media and entertainment sector leader at EY, points out.
Bundling is not only restricted to telcos. For example, Amazon is providing its e-commerce Prime members with ad-free music and video streaming, which is a sound bundling model for them. Globally, Apple’s iPhone is the strongest brand but its search engine, Safari is nowhere in comparison to Google. As a result, Apple has a pact with Google for the latter’s search engines in its devices.
According to a recent Ormax OTT audience report, India has almost 547 million OTT users, but active paid subscriptions remain stagnant at 99.6 million. The report, which also showcased the various devices which are most used by the OTT audience to watch online video content, said that smartphones are the most preferred platform with 97% of Indian OTT audience using it. Further, 81% audience watches OTT content only on their smartphones.
Analysts said that this shows that telcos can best act as platforms, which bundle specialist content, and offer them to their subscribers. Revenue share at the back-end is the best form for telecom operators and OTTs to go forward.
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