Will Carriers Ever Be Able to Make Money from OTT Players?

Jim Machi : Industry Insight
Jim Machi

Will Carriers Ever Be Able to Make Money from OTT Players?

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During a press interview last month a reporter asked me this question: “Will carriers ever be able to make money from OTT players?” I had two responses.

First of all, carriers are already making money from them in a way. That is, the subscribers pay monthly data rates primarily so they can go use the OTT apps. The carriers are becoming much like utilities; the more electric devices you have in your home, the more electricity you will need. So the more OTT apps subscribers use, the more bandwidth they need to use (and pay for).

But that wasn’t the real question. The real question pertained to ever extracting money from the OTT players, either directly or indirectly. I can definitely foresee mobile advertising being such a way to monetize OTT services. Advertising is pervasive in TV and the wired Internet. It’s also coming to mobile, but it’s not quite as widespread there yet. In a mobile advertising world, the carrier is in the middle of it and therefore in the middle of the ecosystem and delivery chain. Clearly, there is money on the table for carriers. A subscriber may want to opt in to receive ads and there might be location-based advertising coming your way, which would be from local businesses instead of from the OTT guys. But at some point, ads for OTT apps (whatever they may be) will pop up while you are playing games, or you’ll see direct MMS ads for an OTT app, or there will be ads of some sort for OTT apps while you are navigating around the Internet. In these scenarios, the OTT player will pay for these ads and the carrier will be in that value chain and thus make some money there.

The interviewer then asked me about carriers selling analytic data, since they obviously know where you are as you carry your phone around. Selling analytic data has been a practice for a long time in many industries. And who knows? Carriers may already be selling this data to OTT players. So, yes, this is plausible, as well.

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