Telco Music Strategy Ironing Out The Strategic Kinks As Objectives Evolve
The 20,000 Foot View In a few short years telco music bundles have gone from a useful ancillary revenue stream to a core component of the streaming landscape. Despite long standing issues about how success can best be measured, telcos continue to invest heavily in music deals that are unlikely to ever deliver direct profit but that instead help drive metrics across the rest of their businesses. Meanwhile streaming services get otherwise unobtainable marketing support and rights holders get large revenue guarantees. On the surface it is an everyone wins situation. But under closer scrutiny it is clear that there are structural and partner issues that must be addressed if bundles are to remain a vibrant business stream.
- The number telco music bundles has more doubled, up from live partnerships July 2013 to in October
- Telco bundle is into its third phase Innovation, following Experimentation and then
- Label, telco streaming service objectives are not aligned and sometimes there are conflicting priorities
- A degree mistrust exists between telcos and
- Streaming services placing greater importance on telco
- Activation rates, differentiation and weak channel support three priorities for bundle strategy
- The four innovation focuses are mixed bundles, bundles, alternative products and emerging products
- There were bundled music subscriber accounts in representing of all global subscribers. will grow to just million at the end of 2015 with subscribers lost from Muve Music and other bundles offsetting growth else where
- Breakage licensing are a key area of with labels remaining firmly wedded the approach and telcos and services pushing for usage models
- Labels, publishers music services need to better what the longer term market of telco bundles should be this needs to be grounded establishing common objectives with telcos
Companies Mentioned In This Report: Apple, AT&T, Celcom Axiata, Cricket Wireless, Deezer, Deutsche Telekom, Digi Malaysia, Globe Telecom, KPN, MetroPCS, Muve Music, Now TV, Omnifone, Rhapsody, Rogers, Sky, Spark New Zealand, Spinnr, Spotify, Telia, T-Mobile USA, Vodafone, YouTube, Yonder
Methodological note: For the purposes of this report MIDiA interviewed a dozen senior executives from record labels, music services and telcos on condition of anonymity. Their responses are aggregated and anonymised in this report.