Operators and Content Providers should work together and bring two-sided business models to market. This will increase the overall allocation of resources to the most profitable use.
ESPN is said to seek these agreements with mobile broadband operators to ensure subscriber access their content. This is a good idea as mobile broadband operators’ movement away from flat-rate pricing makes a two-sided model feasible for all parties. The stage is set for these agreements because 1) subscribers are more frugal with tiered (bucket) data plans 2) content providers want advertising access to high value mobile consumers and 3) many subscribers are hesitant to use their precious gigabytes for video. These trends adversely affect content related advertising revenues.
The two-sided model solves these issues and results in a win-win proposition for everyone with upside for advertisers, content providers, networks and subscribers. As predicted months ago, we will likely see more consideration of these creative business models. For a deeper dive, visit the ABI Research Insight, Master the Reality Distortion Field and Maximize Profits.