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Summary

The telco–OTT partnership deals agreed during 2014 were heavily weighted toward three key areas: video, music, and social media. As Ovum’s Telco–OTT Partnership Tracker: 4Q14 shows, new deals around messaging are also being made, but to a far more limited extent than in 2013, when they were the second-most-common form of agreement. The type of partnership that has seen the biggest growth is around video services, which went from only 8% of deals recorded in 2013 to 29% in 2014, making it the most popular category.

Telcos focus on media

As Ovum’s Telco–OTT Partnership Tracker: 4Q14 makes clear, the overall number of telco–OTT partnership deals agreed in 2014 corresponded relatively closely to the number agreed in 2013. However, what has changed significantly is where the deals are being done. The two most common areas in 2013 were social media (largely focusing on zero-rating plans) and messaging. Although social messaging is still a key area, in 2014 both categories saw a drop in the number of deals compared to 2013: social networking dropped from 29% to 17% of deals, and messaging from 21% to only 9%.

The areas that saw the most new partnerships agreed in 2014 were those related to digital content, especially music and video. Between them, deals focused on music and video services accounted for more than 55% of all the telco–OTT partnerships recorded by Ovum during 2014. The most influential OTT media players were Netflix (14% of all deals in 2014), Deezer (13%), and Spotify (7%). This shift to OTT media illustrates the growing importance of digital content to connected, especially mobile, users, as well as the telcos’ acceptance of OTT as an opportunity rather than simply a threat. Older deals often focused on attracting consumers; now the emphasis is on trying to monetize them better. This is leading to more strategic types of partnership, in which both partners hope to drive new revenue growth. Some 80% of the media-related deals agreed in 2014 and recorded by Ovum provide monetization opportunities; social media and messaging deals offer far fewer opportunities.

Appendix

Further reading

Telco–OTT Partnership Tracker 4Q14, TE0003-000827 (February 2015)

Telco–OTT Partnership Series: Netflix and Pay-TV Operators, TE0003-000805 (October 2014)

Telco–OTT Partnership Series: Sprint and Spotify, TE0003-000785 (August 2014)

Music-bundle management, ME0002-000523 (July 2014)

Author

Michael Philpott, Practice Leader, Consumer Services

michael.philpott@ovum.com

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