Concurrent with the rapid development of mobile services, broadband network operators seem to be encountering the challenges of high profits and high costs, and the quick realization of business transformations is critical. Investing in content has already become an inevitable path for global operators in their broadband business transformations.

Despite the different environments that operators face in different countries, they still exhibit similar growth trends. Early on, British Telecommunications (BT) increased its investments to obtain video content rights, achieving success in content collaboration and business applications. Its operational experience has been replicated by others around the world.

BT as Video Operations Pioneer

BT began to invest in content early on and has reached the third realm of “that person in the dim light” (namely, identifying their direction and achieving success). Meanwhile, many other operators are still seeking out new broadband killer applications or are exploring new video opportunities.

Reportedly, industry regulations, corporate finance improvements, market competition and sustainable corporate development are the driving force behind BT’s investments in content. This is also the same driving force of many operators around the world.

For BT’s executives, video is the best “meat” for filling the ultra-wideband pipeline. By adding premium content to the ultra-wideband pipeline, BT will provide subscribers with the best experiences, which is the operator’s differentiated advantage.

Given its background, BT launched its super-fast broadband (SFBB) business with speeds of 16M and higher across the United Kingdom in 2013; afterwards, it spent £2 billion to acquire “Premiere” and “Rugby Championship” TV rights and tentatively opened the BT Sport channel.

Through investments in sports programs, BT hopes to give broadband subscribers differentiated experiences, with increased revenue from three aspects: enhanced subscriber loyalty and a willingness to acquire subscription TV; attract other operators’ broadband subscribers to pay for BT TV; and television advertising revenue.

Sure enough, bundling ultra-wideband with premium content has spurred rapid growth for BT Sport. BT’s 2013 financial statements indicate that its TV business revenue showed its first positive gains and new SFBB subscribers reached over 2 million, with broadband subscriber churn dropping to historic lows. 2014 statistics show that BT TV (BT broadband + TV) reached up to 1.14 million subscribers with 140 thousand new subscribers for the year and a net ARPU increase of 24 pounds/year.

It’s worth mentioning that it’s not just in terms of business; a headline in British newspaper “The Times” exclaimed that: this is the first time in the 21-year history of the Premier League where subscribers can watch for free. This exclamation greatly enhanced BT’s brand influence in the video field. This is also the reason why BT acquired “Champions Cup” partial TV rights in early 2014. Since then, BT Sport has advanced triumphantly in acquiring sports content, acquiring TV rights or partial TV rights to NBA, WRC, and other video programming in addition to the “Premier League” and “Champions League” TV rights mentioned above.

As can be seen from an analysis of the BT TV strategy, the core of BT’s content strategy is to “continuously enrich content and enhance experiences - TV Everywhere”. Of which, TV Everywhere refers to flexible IPTV and OTT video integration to give subscribers greater convenience. It should be known that many conventional fixed service providers are offering IPTV services with definite success in video services, though they face issues such as OTT video service attacks, business model singularity, bundling, and more. Similar to the TV Everywhere model, this can solve the predicament. For example, on October 30, 2014, BT began to carry out comprehensive collaboration with OTT enterprise Netflix, integrating Netflix services in its services package with bills paid through BT. This marks Netflix’s transition from competing with telecom operators to collaboration. BT has bundled Netflix with 38M+ broadband in the hopes of boosting ARPU.

Additionally, operators must also consider how to differentiate video experiences once they have video content. In this aspect, BT is actively making attempts, announcing the launch of 4K IPTV in August, promoting broadband operations through differentiated experiences. As can be seen, despite the lack of content, the 4K TV wave has arrived. Operators have advantages in terms of fixed broadband, especially with faster speeds in recent years. As such, BT’s launch of 4K IPTV services complies with the rising tide of industry development with video differentiation, enhancing competitive business strength.

Providing Best Video Experiences is the Key to Success

By summarizing the actions of many operators, it can be seen that broadband operators are transforming from such angles as business, networks, and operations, and the key to business model transformations is increasing investments in video content.This model has been defined by industry enterprises as FMC2.0, namely FBB + MBB + content (the “C” in FMC1.0 means “convergence”). At present, the ultra-wideband industry has already entered the FMC 2.0 era with video content as the winning formula for operators. Why has video content become so important? This is because video is a business that consumers can actually sense. Only with video will subscribers have an urgent demand for ultra-wideband access.

Some say that if future applications are not based on video content, they cannot be called applications. As such, video content is the ultimate fate for large bandwidths in the future and release the true power of ultra-wideband.

Video technology itself is changing by the day, and 4K, VR/AR, 360-degree panoramic and high-speed photography, multi-angle MV, 8K, and more are also developing rapidly. Of which, 4K hit the ground running quite some time ago with commercial applications in 2014 available from operators such as KT/SKT/LGU+/NTT/KDDI and others; 8K is also entering the fast lane as South Korea plans to use 8K for live broadcasting of the 2016 Rio de Janeiro Olympic Games, and Japan plans to use 8K for live broadcasting of the 2020 Tokyo Olympics.

Likewise, experiences first require premium video content and secondly require network end-to-end capabilities to guarantee wide bandwidth. Despite good video sources, if a network is unacceptable, subscriber experiences will be unacceptable which is not conducive to the growth of ultra-wideband services. As such, broadband operators must provide video services with the best experiences to be able to achieve business success in the Gigaband era.

In summary, in an era where “content is king”, broadband operators must make plans ahead of time.