Home Analysis Vodafone looking to differentiate via broadcast/apps super-aggregation and D2C value-add

Vodafone looking to differentiate via broadcast/apps super-aggregation and D2C value-add

Vodafone Group is 100% committed to the television business even if it is shunning content exclusivity to focus on the value-add it can deliver as an aggregator of broadcast TV plus streaming apps, with a great content discovery experience and the likelihood of holistic packaging and pricing among the differentiation opportunities. The company believes it is complementary to the D2C strategies of content partners and can help them reach 22 million European homes that are already proven paid television fans. The licensing, packaging, pricing and marketing of subscription TV linear channels will not be affected – apps onboarding partnerships are very much additional, and not substitutional.

Rolf Wierig of Vodafone Group (left) at Connected TV World Summit
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Asked recently about the company’s ongoing commitment to the television business, given the growing competition for attention and revenues, including from ‘OTT’ streamers, Rolf Wierig, Global Head of Entertainment at Vodafone Group, made it clear: “We are very committed, very committed.” But he did confirm that original content is not where Europe’s second or third largest Pay TV provider (depending on how you count the numbers) intends to add value, commenting that “exclusive content licensing adds fairy-dust to marketing and comms, but it does not do the trick for us when it comes to adding explicit value for customers.”

Instead Vodafone Group, which counts 22 million TV households across 11 European markets, believes it will stand out by providing homes with a mix of broadcast linear TV and the streaming services they want, in a unified experience that is built upon bespoke and individualised discovery for each household, itself driven by smart metadata integrations, plus complementary partnerships with direct-to-consumer streaming services that range from simple reselling to carrier billing to customer care. And Wierig added that centralised negotiations with content providers should enable discounting for Vodafone customers.

Reiterating the commitment to television, the executive pointed to the strategic reorganisation of Vodafone Group to create a harmonised, pan-European approach to television product and innovation. Wierig heads the new Group Entertainment department, created 2.5 years ago, that is creating this more holistic entertainment strategy, backed by a global product management team and featuring centralised negotiations with content providers.

Speaking at Connected TV World Summit in May, Wierig said Vodafone avoids any possibility of becoming a ‘dumb pipe’ by extending its connectivity DNA and customer footprint to new product categories spanning entertainment, smart-tech, home ecosystems and payment solutions. And in entertainment, it is the complementary nature of the partnerships with streaming TV services that is driving innovation. “We support the direct-to-consumer strategies of content providers by giving them access to our connectivity customer base and our strong marketing and sales performance. We work closely with them to help them penetrate our customer base with their content and services.”

Wierig said that yes, Vodafone is a super-aggregator, but he emphasised that this means the aggregation of both broadcast TV and “the very valuable and relevant content from the OTT streamers.” It is not just about aggregating apps. He pointed to a 60% viewing share for linear TV today – and believes it will remain at this level. “That means our clear goal is to bring relevant content to our Vodafone homes as a hybrid solution – a best-of-breed and ‘best-of-blend’ across linear TV, with its associated TV Anytime and TV Anywhere, plus the best OTT services.”

Asked by interviewer Ben Keen, Analyst & Advisor, Technology, Media & Telecoms, if more apps would mean less subscription TV linear channel deals, the answer was a firm ‘no’. Wierig made it clear that Vodafone Group is committed to aggregating linear Pay TV channels that it licenses, packages, prices and markets.” But it was clear that more apps onboarding and apps-based viewing will mean holistic packaging and pricing innovation, with bundling viewed as a key value-add. “One of the elements we can bring to the table is centralised negotiations, and the chance of a discount [on the cost of a streaming service].”

Wierig believes Vodafone can help streaming services to grow at a time when consumers may need convincing that they should add a second or third paid service to their streaming stack. He also believes that the introduction of lower-priced, ad-supported tiers by some formerly subscription dominated streaming services will give Pay TV operators more flexibility when creating bundles and placing OTT services into packages.

Content discovery is where Vodafone can add serious value to streaming apps partners and, given that streaming services can be found pretty much everywhere, this is a business imperative if you want to play in the future aggregation marketplace. “The question is how every consumer can find the right content, given that content sources are increasing significantly. So, we look closely into customer segmentation. Our goal is to give every customer – whether a family with kids or a single person household, or a couple – an individualised experience.

So, this is about discovery, and that requires proper metadata integration and unified search across various content offerings. “It is not always easy to convince OTT service providers to be really open [with metadata] but we are getting there, first of all because we are complementary to their D2C approach and we can offer strong marketing and sales, and that is a perfect fit strategically,” Wierig told the London audience.

Vodafone Group is particularly active as a TV provider in Germany, Spain and Portugal, and has enjoyed content exclusivity – as with sports rights – in certain markets. But the Group has concluded that it is generally happy with non-exclusive partnerships. Wierig agreed that this has the affect of de-risking the business, providing a better ‘risk-to-reward’ balance. Shunning exclusive content rights like sport does not mean turning down any exclusives, however, as seen by the recent HBO Max exclusive telco marketing partnership with Warner Bros. Discovery, for example. “It does depend on the opportunity, and where it is needed and it is helpful, and where the risk/reward profile works, it is something we can look at. But in general, we are more on the non-exclusive path.”


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