If you want an example of how complicated communications and media ecosystems have become, note what Google Chairman Eric Schmidt said recently. The television industry should embrace technology companies and the open spirit of the Internet, Schmidt told a gathering of TV executives in Edinburgh, Scotland.
“We are not your enemy and we want to help,” said Schmidt, who delivered the annual MacTaggart address at the Edinburgh Television Festival. He
stressed the need for cooperation between Google and the TV industry and refuted claims that Google works against the interest of content owners.
Apple has faced skepticism from music executives in the past, from some print content and video and movie executives more recently, for similar reasons, one might argue. Executives broadly are aware that their businesses are changing, but aren't completely sure how to best ensure their own relevance and value in the new businesses everybody expects will develop.
Schmidt’s remarks illustrate a basic fact about content and communications business these days, namely that value now is derived from ecosystems, unlike the situation several decades ago, when value almost completely could be controlled by vertically-integrated providers.
These days, telcos and cable companies alike operate in markets where value is supplied by many different partners. “Telecom ecosystems were easier to define in the days of monopolies and nationalized postal, telegraph and telephone organizations (PTTs),” says Jörgen Lantto works with systems management within multimedia at Ericsson. “Nowadays, they include everything from developers and devices to Google and billing systems.”
One only has to look at the Apple iPhone as a device, or Facebook as an application, to sense the change.
In fact, some of us would argue that, over time, as voice and text messaging become less important revenue sources, and broadband access becomes the the anchor service, other important partners will have to be accommodated as well.
Visa, MasterCard, large power utilities, ad networks, major retailers and major banks are among the new partners access providers will find themselves counting on to construct the big new businesses all tier-one providers will need to create.
That is why, though it might not always seem intuitive, it matters that Steve Jobs has stepped down as CEO of Apple, or that Google is buying Motorola, just as it matters what success Amazon has with its cloud computing business.
Until as recently as 2000, it was pretty clear what the telecommunications sector was all about, said Forrester Research analyst Mike Cansfield. “Customers – consumers at home and firms at work – bought calls and lines from telcos, which in turn purchased the technology components required to create their products from network equipment providers (NEPs). Since the Millennium, we have seen this supply chain change rapidly,” he says.
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Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.Edited by
Jennifer Russell
