Do all roads lead to Rome?

Jonathan Faurie Founder Turnaround Talk

Disruption, disruption, disruption. This has been the mantra since the world was thrust into the current economic/business paradigm that we are facing.

Businesses are acutely cognisant of the fact that they need to reset, rethink and reimagine their business models in order to fast track growth in an environment that is driven by risk. This growth, while important, is often not easy to find. This is because the movement towards a digitally governed society has levelled the playing field and has allowed an increased level of competition.

Two of the most highly competitive industries in the world today are entertainment platforms and mobile phone producers. Two major stories caught my eye last week for the simple reason that they discuss two polar opposite strategies which the companies feel will fast track their growth.

Innovation
The first strategy is innovation. Last month, Turnaround Talk published a thought leadership piece on the fact that CNN is going to be massively investing in its online streaming service.

A recent article pointed out that BBC and ITV recently launched their BritBox streaming service in South Africa, featuring some of the content no longer available on DStv, after it cut certain channels provided by the popular UK broadcasters. Not so long after that announcement, Disney+ announced that it will be launching its online streaming service in South Africa with rumours of HBO planning a similar move.  Whether this proves to be true remains to be seen though.

This is great news for consumers who want to have the latest news and entertainment at their fingertips. But what does this mean for cable tv and satellite tv providers? There are already calls from South African consumers that Multichoice has been resting on its laurels for way to long and that DSTV needs to seriously rethink its service offering.

Streaming services are the entertainment models of the future
Photo By: Canva

South African broadcasting analyst Thinus Ferreira recently spoke to MyBroadband and told them that the consolidation of content onto streaming services may be the death of DSTV Premium. “Consumers don’t mind paying a lot for something expensive. However, whether you’re rich, middle-class, or poor, nobody wants to waste money or feel as if they’ve been taken advantage of,” he explained. The problem is that MultiChoice keeps diluting its DStv Premium offering and is not doing enough to bolster or even maintain the value offered, Ferreira stated. In recent years, the company has dropped several of its more popular international channels and appears to be prioritising local content. However, Ferreira said its so-called “hyper-local” focus and emphasis on mid-market customers felt like “a bit of a cop-out”.

DSTVs two major pillars of strength has been:

  • Its focus on local content on its Africa Magic Channels; and
  • Its sports coverage which is unparalleled in Africa.

But even if we look at the sports coverage side, rugby and football are Supersport’s major drawcards. One of the reasons why viewers watch the channels is for the expert opinion before the match. Again, this has been diluted when it comes to the Barclays Premier League because Supersport has been forced to use Sky TV’s expert build-up as part of the broadcasting rights they purchased from Sky.

Keeping up with change
While there is a movement towards collecting content on digital streaming services, there is also a demand for an aggregator of these services. At the end of the day, nobody wants to have yet another service that they have to remember a password for hand have another debit order go off their account when they can belong to one service where one premium is paid for access to a plethora of streaming services.

Multichoice has announced that it will launch a streaming service in due course, and it has already launched its aggregator model with Amazon Prime and Netflix being included into the price of the DSTV Premium package. But time is of the essence. More services need to be added as soon as possible if Multichoice wants to keep up with the pace of change.  And there needs to be a sports streaming service.

Pause and engage
At the height of technology development into mobile devices, Samsung and Apple were the two standout companies. Microsoft tried to throw its hat into the ring, but its Windows Phone just couldn’t square up to anything being produced by the afore mentioned giants.

The second interesting article I read regarding growth was the fact that Apple announced that all development into improving its handheld devices has been put on hold as the phone (outer cosmetic development) and is focusing its future development into streaming services.

A TechCrunch article points out that Apple just won a well-deserved Emmy for best comedy for Ted Lasso, a feel-good series on Apple TV+. But the company’s chief product, the iPhone, is long past its own days of critical acclaim. As Apple leans back from being the world’s most consequential innovator to bundle media services instead, its continued monopoly power over the most important technology hardware in many people’s lives and its resulting complacency should frustrate consumers and the broader telecommunications landscape.

Its back to the drawing board for most entertainment companies
Photo By: Canva

The article points out that, Apple, 14 years after releasing the first iPhone, is now a force to be reckoned with in Hollywood. Ted Lasso, which stars Jason Sudeikis, turned an easily forgettable requisite tile on the iPhone screen into a must-watch streaming-TV service. What had been a two-horse race between Netflix and Walt Disney Co’s Disney+ now includes Apple TV+ — and it needn’t do much to secure its place considering already about a billion people carry around a six-inch Apple billboard most hours of the day.

Apple has long followed a unique business model by trying to make every device in a person’s home an Apple device. iPhones work best with iPads that work best with Macs when they are all part of the same home network. By making Apple TV only available on Apple devices is a smart move on the part of the Silicon Valley giant.

With the exception of China, Apple is a hit in every country around the world. And this is where this story takes a fascinating turn. Apple has made its intentions clear that it desperately wants to break into the Chinese market. But the Chinese are funny about their technology preferring home grown companies. With China’s ambitions to become the largest producer of tech by 2025, is Apple’s decision to stop innovating the look and feel of their phone a bit premature?

All roads lead to Rome?
All roads lead to Rome is a popular English proverb which essentially means that: while two different companies may take the different paths to doing something, the outcome is the same at the end of the day.

Is this the case in this instance? While there is no doubt that moving towards streaming services is the entertainment model of the future, is Apple’s decision to move away from the business model that the company built its fortunes on a bad one? Innovation is the key to success, but at what cost?

If you, as a BRP, were presented a similar plan by your client, where they explicitly say they want to move away from something that the company was traditionally good at in order to achieve growth, would you advise them against it?