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Telco content route puts money in wrong place: Vodafone Australia CEO

Partnering with content providers is 'more sensible' and a better use of money than purchasing rights, according to Vodafone Australia's CEO.
Written by Corinne Reichert, Contributor

Vodafone Australia CEO Inaki Berroeta has criticised the entrance of telecommunications providers into the media content rights ownership arena, saying it is a costly exercise that is difficult to monetise.

Partnering with rights holders rather than purchasing the actual rights gives customers choice, and frees money up to spend on network investment instead, which is the role of an operator, Berroeta said.

"Content is extremely expensive, and is extremely difficult to monetise it, unless you create it. That's my view," Berroeta argued.

"In principle, I think that the agreements we have are more sensible around partnering with people that create good content, and then be able to offer that content to customers, [rather] than just buying rights with a very difficult financial return.

"And if you are putting your money there, then you are probably not putting it in all the places for the customer, and the question is what are we subsidising -- are we subsidising content or are we network operators? And that is a challenge.

"If you look at all the money that some ... operators are paying for football and all that ... I like more the partnering."

Berroeta's comments follow competition between rival telecommunications providers Optus and Telstra, which are both adding media streaming to their offerings in an effort to attract and retain customers.

Telstra and Optus are also competing on sports content, with Optus acquiring the exclusive Australian broadcast rights to the EPL for the next three seasons to broadcast on its Fetch TV set-top box, along with 10-year deals with the Australian Olympic Committee and Paralympic Committee, and a FIFA World Cup broadcasting sub-licence.

Telstra, meanwhile, purchased the broadcast rights for the Australian netball league for the next five years. It also holds the digital rights to the AFL and NRL, while its Telstra TV device, launched last October, enables customers to access catch-up and streaming services SBS On Demand, 9JumpIn, Plus7, Tenplay, ABC iView, BigPond Movies, Stan, Presto, and Netflix.

While Berroeta emphasised that Vodafone is a telecommunications operator, Optus announced a series of redundancies allowing a "reshape" of its workforce amid its transformation into a multimedia company, while Telstra is also cutting and offshoring hundreds of jobs after announcing that it would be rebranding into a technology firm.

Berroeta on Wednesday also announced that Vodafone will be conducting demonstrations of 5G on its network in the second half of 2016, and revealed the company's 2016 Internet of Things Barometer.

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