When I explain that I license linear channel programming to CATV and Telco TV operators, I am often asked why I put such a focus on Telcos when Telcos have so few subscribers relative to cable. This question inevitably leads to a discussion of "The Long Tail" of television content. This statistics term describes distribution models where a product is not desired by a majority of consumers, but it is desired by a significant number of target consumers. Anyone that distributes the product to this unique but material customer base can capitalize.
This model is particularly applicable to television. Simply put, there are large numbers of viewers who want specific content such as multicultural and niche programming. If you can provide them that content, you obtain a loyal and significant viewer base. This is problematic for CATV due to bandwidth limitations; they can only offer a limited number of channels. But due to the Telco TV architecture, a great number of channels can be offered so these specialized channels can be distributed to those seeking them. It is here where Telco TV can distinguish itself from CATV and why the Telco TV market is worth focusing on.
The idea is to offer ethnic (multicultural) programming to those that want it. There are over 30 million people in the US that speak languages other than English. Many of these people desire programming either from, or the subject of, their native country. The proof of this can be seen in the success of Direct to Home (DTH) satellite systems and broadband Internet television services. Millions of ethnic viewers have embraced these mediums to obtain their desired content, although many would tell you that the service is expensive, inconvenient, and/or low quality. If the same content were available on their local cable/telco system, they would happily become subscribers. |
Even with Telco TV's architecture, there are limits to the number of channels that an operator can afford to carry. So there must be some method to determine what to carry. A review of the demographics of the homes-passed seems like the best approach. At PathFinder World Video we perform a demographic study at no charge for operators to determine what the ethnic makeup of their viewer base is. We then offer those channels that best meet the needs of their viewers. Hispanic and African American content are usually in demand, but there are often large demands for Asian, European and Middle Eastern content as well. In certain regions there may be very specific demands such as for Croatian or Russian content. The key is to match the content with the audience. When you can do this, you provide a significant number of viewers a reason to choose your service over your competitors.
The cable industry is aware of this and they are trying to take advantage of it; even though they have to be very selective in choosing the content that they will dedicate bandwidth to. One of the largest MSOs even has its own division to acquire and distribute ethnic programming; even to other MSOs. But while cable operators have a tremendous head start, Telcos could take advantage of their "Long Tail" distribution model to compete successfully. Even rural Telcos who have limited ethnic audiences can take advantage of this model through niche programming. Content remains king and it is all about getting your viewers the content they want to see. |