Deutsche Telekom (DT) has revealed an aggressive content strategy to differentiate its Entertain IPTV service today. At the IFA event in Berlin this morning, the German incumbent announced a new UHD set-top box and a slew of new content partnerships, including deals for exclusive content.
Deutsche Telekom AG (NYSE: DT) has been active in sports programming, investing heavily in exclusive sports coverage, such as football (soccer for you Yanks), basketball and ice- hockey. But today's announcements are about scripted entertainment content, i.e., TV shows and movies -- a whole new area for the operator.
The operator announced a new partnership with German production house UFA, which will give it access to a range of German films. It has also signed up exclusive rights to a number of hit TV shows including The Handmaid's Tale, Better Things and Canadian crime drama Cardinal.
The operator also announced a partnership with Fox Networks for exclusive distribution rights (in Germany) for its European VoD service, FOX+. This includes several seasons of hit shows, such as The Walking Dead, Prison Break and 24.
DT sees its role as an aggregator of content, with the goal of creating a single platform that subscribers can use to access a broad range of services and content seamlessly. This strategy also covers its planned autumn launch of the MR 401 set-top, which will provide direct access to Netflix Inc. (Nasdaq: NFLX) via a new partnership. The device is UHD-ready, and will also be able to support UHD content from other providers, including Sky and YouTube, all via the Entertain TV platform.
Speculation about DT's content strategy has been rife since board member Niek Jan Van Damme said the operator planned to invest a "three-digit million-figure in content" at the ANGACOM event in May earlier this year.
And while the hundreds of millions in content investment falls well short of the $6 billion or so that Netflix is planning to spend just on exclusive content, it marks a notable shift in the strategic approach of the operator. DTs content moves follow the programming thrusts by such US operators as Comcast (which acquired NBCUniversal) and AT&T (which is trying to acquire Time Warner), Spain's Telefónica (which plans to become the largest Spanish-language content producer in the world), and France's Orange (which launched a new content division). (See Orange's New €100M Content Plans Reflect CFO Wariness.)
Today, regardless of whether they think so or not, all telecom operators are in the video business. When more than 70% of the traffic on their network is video, that one application is increasingly driving network planning and even operational decisions. So it simply makes sense to look for opportunities to move further up the video value chain, be it as technology/platform vendor or as a content provider. Not every initiative will be successful, but especially for larger, multi-country operators, ignoring video is not much of a plan.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation