Sky convinces Netflix to do the thinkable: move titles off its platform

Having initially announced a tie-up earlier this year, Sky has somehow managed to convince Netflix to loosen the grip on customer experience, integrating its biggest titles into a very chunky on-demand package.

As part of the partnership, Netflix content will be hosted on the Sky platform, allowing customers to access a huge number of on-demand titles without having to navigate between different streaming apps. Having to navigate through different windows to find the right content can be a frustration for consumers which Sky is certainly addressing, though it does seem to contradict the Netflix ambition to standardise customer experience across all platforms and partnerships.

Across one page users will be able to navigate through Sky’s content such as Patrick Melrose and Tin Star, HBO’s Game of Thrones, Showtime’s Billions and now, Netflix titles such as The Crown, Stranger Things, The Kissing Booth, Making a Murderer and Queer Eye. It’s a lot of quality content for one place, cementing Sky’s position as the UK’s king of content.

“Sky wants to position itself as an aggregator of services as underlined by recent tie-ups, bringing services together is to be offer users a seamless and integrated service experience,” said independent telco and tech analyst Paolo Pescatore. “Therefore, the move further increases Sky’s own value as a one stop shop provider. More importantly it will also get access to Netflix’s catalogue and metadata which will prove more attractive to Disney.”

“Europe lags the US when it comes to cord cutting due to numerous reasons. Among other things the pay TV penetration is a lot lower in Europe and has been dominated by a handful of players. However, both regions are seeing huge growth in binge watching driven by changing user behaviour towards on demand programming.”

The mega on-demand deal will cost £10 a month, alongside a Sky Q subscription, with a 31-day rolling contract available as an option. It might be more expensive than a normal Netflix subscription, but with Sky’s box set content available for £5 a month, professional bingers will be able to save money combining the pair.

Sky Netflix

While this is a massive coup for Sky, it is a strange turn of events for Netflix. Last week at IBC 2018, Maria Ferreras, VP of EMEA Business Development at Netflix, stated that while the business was open to partnerships the experience would remain consistent across all platforms and partnerships. In allowing Sky to host its programming on its own content platform, Netflix has essentially handed over the management of customer experience. It’s an interesting announcement with Ferreras insisting maintaining a high-quality and standardized experience across all platforms was critically important for the business.

That said, another ambition of the business is to make its content as accessible as possible. Improving accessibility is one aspect of the strategy to secure additional subscriptions as the growth rate looks like it is beginning to wobble. Perhaps this is simply a compromise. As growth momentum slows executives have to make difficult decisions, some of which they will not like, and maybe this is one. The drive for new subscriptions seems to outweigh owning the customer experience.

Now before anyone gets too excited about this being a possibility for every content platform, this will probably not be the case. Ferreras highlighted last week that each partnership is weighed on its own individual merit. There are frameworks in place to guide the parameters of each relationship, though the end product will entirely depend on who is sitting on the opposite side of the table.

Taking this an example, Netflix might have been happy to hand over the customer experience management because Sky has an excellent content platform which it has spent years honing; it is a solid experience with content easy to find. Others cannot say the same, take Virgin Media for example. We cannot imagine Netflix would allow a similar integration of content due to the cumbersome nature of the TV offering.

The search for new subscriptions will certainly take Netflix into some interesting partnerships. After the last quarter’s results, were subscription growth looked to stagger, there might be more pressure for executives to loosen the stranglehold on the platform, and be more flexible when it is discussing partnerships. Netflix still has the upper-hand when it comes to negotiations, though if it wants to maintain its lofty market cap ($152 billion!!!) it will have to be more pliable. Offering more access to its valuable customer data and behaviour insight could be one of those areas.

UK eyes Africa for technology conquests

Millions across the continent are shaking in fear, not in anticipation of a technology-orientated wave of colonialism, but in anticipation of UK Prime Minister Theresa May dancing in celebration.

Following an announcement from the Department for International Trade which outlined future trade relationships between the UK and various African nations, the Department for Digital, Culture, Media and Sport is weighing in on the African expansion. New partnerships in South Africa, Kenya and Nigeria will include dedicated teams to boost innovation in technology and research, an accelerator programme to help grow African start-ups, and entrepreneurship schemes.

“Nigeria, South Africa and Kenya’s technology sectors are growing rapidly and generating a significant part of their economic output. This means huge opportunities for UK businesses and for future partnerships,” said Digital Secretary Jeremy Wright. “New ideas, game-changing research and cutting-edge science are good news for our African partners and good news for the UK’s world-leading scientists, technologists and researchers who are representing the country on a global stage.”

As part of the new relationship, UK entrepreneurs will work alongside business men and women in Africa to develop new ideas in next generation technologies. Aside from charitably sharing their own expertise, the engagements will open up new opportunities in largely untapped markets. While African nations are playing catch-up, technology is making a more significant impact on society, with the sector accounting for 10% and 11% of the Nigerian and Kenyan economies respectively.

“Africa’s economy is projected to grow by 3.2% in 2018 and to a further 3.5% in 2019, according to the latest 2018 World Bank report,” said Julian David, CEO of techUK. “Kenya, Nigeria and South Africa represent a significant part of that growth with technology increasingly underpinning these numbers. The decision to set up Innovation Partnerships and extend the tech hub network to these African nations shows the Government clearly recognises this opportunity.”

Aside from creating new revenue opportunities, UK tech enthusiasts also might learn a thing or two when it comes to mobile money. While digital payments are a comparatively new craze in the UK, there are much more established markets across Africa. Today more than half Kenya’s daily GDP goes through mobile money, with mobile-phone based money transfer service MPesa one of the most popular.

The news might be worth rejoicing about, but we are all hoping our PM is excited enough to break out her own version of ‘dancing’.

 

Three looks to complimentary brands to focus on retention

Three has announced the launch of a new two-year partnership with EasyJet to build out its loyalty programme for customers.

As part of the agreement, Three customers will be able to check in hand luggage for free, while also taking advantage of priority boarding amongst other benefits including a free tote bag for carry-on essentials. This partnership is the latest to buffer the Three customer experience strategy which also includes tie-ups with Snapchat.

The partnership could said to be based on O2’s Priority engagement strategy, which has been incredibly successful over the years. It also demonstrates a different mentality to what we are used to when it comes to telcos; reward current customers with incentives, as opposed to simply focusing on bolstering subscriber numbers.

The loyalty app itself, Wuntu, now has 1.1 million active users, up from 350,000 over the last twelve months, and features 400 partners. Over the course of the first six months of 2018, there was a total of 1.5 million offer redemptions from customers, up from 400,000 in the same period of 2017. Partners include the likes of Hotel Chocolat, Dominos and Belle Italia, though EasyJet could arguably be described as one of the more significant wins.

“The EasyJet partnership gives us a big chance to influence our customer’s experience in the airport,” said Three CEO Dave Dyson. “It’s a company which has a very like-minded audience, and is a chance to bring extra value to customers.”

For the moment, the scope of the partnership is limited, but there are two years to play around with new ideas; Dyson said to expect a variety of new offers. Snapchat is another example of a partnership which could work out very well for the business. In both examples, Three has identified brands with similar audiences and identified a pain-point to address; queues in the airport and data consumption with Snapchat users. These are two examples of a company pragmatically identifying how it can add value to the experience, without making risky plays through diversification.

Like O2’s Priority initiative, Three is playing a low risk game. The value is being presented to the customer, though it is an option. Some telcos have gone down the content route to enhance the experience, but this could prove to be expensive (just ask Gavin Patterson). By offering other brands access to its subscriber base, and in return gaining exclusive offers for customers, it is a win-win situation.

The idea of brands audience sharing is not new, but it is extremely effective. By asking customers to download an app, its less intrusive than the traditional means of spamming, and opens up a huge number of opportunities. More importantly, Three is looking inwards, caring for the customers it has, not simply reserving attractive offers for new customers; this is an excellent way to isolate a current customer and destroy a relationship.

There are of course numerous studies online which argue the point of customer retention versus acquisition, with some claiming acquiring new customers can be five times more expensive than retention. Caring for a customer, creating a relationship which makes them feel valued, is also an excellent way to increase revenues in other areas of the business. Just look at the brand and loyal customer which Apple has created over the years; many of these iLifers would choose to purchase Apple products over others irrelevant whether there are better or cheaper options.

Loyalty programmes are not uncommon, but many seem to be slap-dash and only present because it seems to be the right thing to do. That said, we get the impression Three has seen the light and might start treating current customers with the attention they deserve.

BICS and Fastweb combine to link Europe and MEA

Connectivity vendor BICS has joined forces with Italian operator Fastweb to augment communications links between Europe, the Middle East and Africa.

The strategic partnership aims to combine BICS’ pan-European network with Fastweb’s fibre backbone in Italy and its access to submarine cable systems originating in Sicily. The point of this joint effort is to offer intercontinental connectivity services wholesale to other operators.

“We are highly satisfied with this partnership agreement with such a major international player as BICS, which highlights the strength of our network and the solid nature of our strategy,” said Fabrizio Casati, Chief Wholesale Officer at Fastweb. “The partnership with BICS adds further value to our investments, following on from our participation in the Open Hub Med consortium in Sicily and the development of an innovative and future-proof Flexible Optical Network all along Italy.”

“BICS has always been committed to providing its customers with first-class connectivity, and this partnership confirms our position as a bridging partner for operators expanding their capacity provision throughout Europe,” said Daniel Kurgan, CEO at BICS.

In case you’re wondering where else BICS connects here are a couple of maps for you. We couldn’t find any for Fastweb, sorry.

BICS Europe

BICS global

UK finds India in search for post-Brexit fortunes

The UK and India have announced a new tech partnership to identify and pair businesses, venture capital and universities, British and Indian entrepreneurs and small and medium enterprises make a splash in the connected economy.

The aim here will be to replicate a partnership with Israel, which led to £62 million worth of deals over the past five years, and also a windfall of £600 million for the UK economy, the government claims. The free-trade deal with India is hoped to generate £1 billion worth of new commercial deals, a claim which will add confidence to those fearing the economic fallout of the UK’s divorce from Europe.

“This is an incredibly important partnership and something tech businesses from both countries have been driving for,” said Julian David, CEO of techUK. “The UK and India are leaders in the development and use of digital tech, and there is a huge amount we can learn from each other and big opportunities to join forces in innovation.”

The initial pilot scheme, which will see the UK government contribute £1 million, will aim to build the network working with the British High Commission in New Delhi, the Indian Government and the private sector in order to increase tech investment, exports and R&D. The first connection between the UK will be with Pune, focussing on the Future of Mobility, including low emission and autonomous vehicles. Future links between various regions in the UK and India will aim to expand the capacity to new emerging tech. A tie up with Bangalore to focus on augmented and virtual reality, advanced materials and AI, has already been tabled.

AI and the data economy, clean growth, and the Future of Mobility, are three areas which are going to be at the forefront of this relationship, ticking the strategic objectives of the UK government. These are all sub-sectors of the technology world identified by the UK in the Industrial Strategy. Taking a leadership position here would put the UK is a very promising position as the connected economy develops.

Brexit will be here before we know it, however trade discussions are not progressing as many would have hoped. Partnerships with non-EU nations such as India, where the developing economy can act as an excellent growth machine for UK firms, will certainly boost the nations credentials in the global marketplace. A couple more of these partnerships might start to rectify some of the damage done to the UK after the costly and problematic divorce.

Huawei and Baidu team up on AI

Huawei and Baidu have announced a wide ranging partnership to develop artificial intelligence (AI) platforms and technology, to internet services and content ecosystems.

The tagline itself might sound a bit ominous, ‘AI that knows you better’, but it is where the industry is heading. More comprehensive artificial intelligence applications which reveal information about you which you didn’t even realise you had given away. Another concern might be held in Silicon Valley; two of the worlds’ most successful latecomers to the technology tsunami teaming up to steal AI fortunes from California.

“The future is all about smart devices that will actively serve us, not just respond to what we tell them to do,” said Richard Yu, CEO of Huawei’s Consumer Business Group. “With a strong background in R&D, Huawei will work with Baidu to accelerate innovation in the industry, develop the next generation of smartphones, and provide global consumers with AI that knows you better.”

“It should come as no surprise that Baidu and Huawei are working together, because we have many similarities – technology is embedded in our DNA and we have developed our own technologies in order to grow,” said Robin Li, Baidu CEO.

“The Internet era is evolving into the era of AI. Baidu has been dedicated to the field of AI for a long time. Huawei has a large user base. Together, Baidu and Huawei can do many things which we were not able to do in the past. The Chinese saying ‘let a hundred flowers bloom’ is a good way to describe our cooperation – today we planted the seeds, and I believe soon they will grow into many flowers.”

The plan is to build an open ecosystem using Huawei’s HiAI platform and Baidu Brain, a compendium of the company’s AI assets and services. The open ecosystem will make use of Huawei’s Neural Network Processing Unit (NPU) and Baidu’s PaddlePaddle deep learning framework to democratize the power of AI for developers and accelerate the introduction of new offerings.

First up will be work on voice and image recognition for smart devices, as well as building an augmented reality (AR) ecosystem, to help move along another area which has the potential for major disruption. Such work might be able to help both brands make stronger strides into the international markets.

One area for Huawei which might be a focal point is cracking the US market with its smartphones. Huawei has made solid progress in the developing markets, but reports in recent weeks have seen some positive moves in the US. That said, the Apple and Samsung dominance will be difficult to crack, therefore the team will have to create a solid USP to make waves. AI, AR and VR might be that differentiation the brand needs.

Aside from consumer applications, the promise of productivity gains has seen businesses flock to the likes of Google, IBM and Amazon to cash in on the craze. Huawei has proved it can turn a segment on its head, Ericsson and Nokia will testify to this, so the techies-club in Silicon Valley should be a bit worried about China stealing the AI thunder.

Nokia gets into bed with Amazon

Nokia has announced a ‘strategic collaboration’ with Amazon Web Services, with the stated aim of helping telcos move to the cloud.

These seems to be quite a wide ranging partnership in which Nokia will help service providers migrate to AWS and AWS enterprise customers will be offered Nuage SD-WAN services. Additionally the two companies will collaborate on 5G and IoT use cases for service providers and other enterprise customers.

Here’s how they put it:

  • Nokia will support service providers in their AWS implementation strategy with a complete suite of services including consulting, design, integration, migration and operation for infrastructure and applications.
  • Nokia and AWS will work together to generate new 5G and Edge Cloud strategies and guidance for customers including reference architectures that enable both service providers and enterprises to benefit.
  • Nokia and AWS are working to bring an improved user experience for Nuage Networks SD-WAN customers who use AWS. Enterprises can benefit from this seamless integration with AWS and launch secure branch connectivity in hybrid environments with “Single Pane of Glass” capabilities.
  • Finally, the companies are commercializing IoT use cases with AWS Greengrass, Amazon Machine Learning, Nokia Multi-access Edge Computing (MEC) and Nokia IMPACT platform.

“Our collaboration with AWS will accelerate the migration of service provider applications to the cloud and enable us to forge new opportunities together by delivering on next-generation connectivity and cloud services,” said Kathrin Buvac, Nokia’s Chief Strategy Officer. “This is a wide-ranging collaboration, spanning our services capabilities in application migration, SD-WAN from Nuage Networks, 5G, and IoT, allowing new growth opportunities for our top customers across both the service provider and large enterprise market segments.”

“Service providers are accelerating their migration to AWS in order to drive innovation for their customers and deliver lower total cost of IT to their organizations,” said Terry Wise, Global VP of Channels and Alliances at AWS. “We are excited to partner with Nokia to accelerate cloud transformation for service providers, and enable the digital transformation journey for our mutual large enterprise customers.”

Nokia seems to be busy, bordering on hyperactive, these days. But amid the spam of recent weeks this announcement has the potential to be especially significant. Everyone knows the cloud will be vital to pretty much all the next telecoms megatrends, so becoming friends with benefits with the biggest cloud provider would seem to be a good career move for Nokia.

Bharti looks to Korea for inspiration

Bharti Airtel might be involved in a drawn-out mobile slugfest with Jio, but a partnership with SK Telecom could offer a bit of breathing room for the under-pressure operator.

The partnership will work across several areas including developing bespoke software to improve Airtel’s network experience, using digital technology including machine learning, big data and building customized tools to improve network planning based on every customer’s device experience. Leaning on the experience of the facilitator of one of the worlds most advanced digital economies is not a bad idea.

“This partnership will bring a dramatically improved experience to Airtel customers in India by leveraging the expertise of a company that has built one of the best mobile broadband networks in the world,” Said Sunil Bharti Mittal, Chairman of Bharti Airtel.

“Strong partnerships have been a hallmark of Airtel’s growth journey and we are proud to have always looked ahead to bring the latest technology to India. With SK Telecom’s clear and undisputed leadership in technology, this is one partnership that will decisively change the game in India and put the country at par with the most advanced broadband nations in the world.”

Perhaps Bharti investors do not have the same poker face as Jio billionaire owner Mukesh Ambani, but this would appear to be a play for quality over quantity; Jio can continue to offer more, but our mobile broadband experience will be better, Bharti seems to be saying. It’s an interesting choice to make, and one which has split the masses for decades. Some will want more (or cheaper in this case), but some will want a better experience.

The two companies will also collaborate on an on-going basis to evolve standards for 5G, Network Functions Virtualization (NFV), Software-defined Networking (SDN) and Internet of Things (IoT), while also working together to build an ecosystem to deliver the technologies in India.

“SK Telecom will work closely with Bharti to achieve new network innovations so as to deliver a greater value to Bharti’s customers,” said Park Jung-ho, CEO of SK Telecom.

Bigger or better, the age-old question.

Ericsson makes major autonomous driving move with Zenuity partnership

The Ericsson IoT Accelerator platform will be used to power the Zenuity Connected Cloud, a white-label autonomous driving cloud solution for car-makers.

In a great illustration of how megatrends such as 5G and IoT are creating new opportunities for the telco industry, Ericsson is effectively getting into bed with a major car-maker and the biggest car-safety component supplier. That’s because Zenuity was created earlier this year as a joint-venture between Volvo and Autoliv specifically to focus on advanced driver assistance support (ADAS) and autonomous driving.

The Zenuity Connected Cloud seems to be designed to giver car OEMs a head start in the autonomous car game by dealing with the IoT (i.e. connectivity, sensors, data processing, etc) stuff for them. It will also deal with the integration of in-vehicle software, security and the use of cloud-based safety data.

“With a strong focus on increasing safety through ADAS and AS software and functions, our unique expertise in ADAS and autonomous technologies combined with Ericsson’s technology leadership in complex connectivity solutions is a win-win for the entire automotive industry,” said Dennis Nobelius, CEO, Zenuity. “Together, we will provide OEMs with unique, robust and scalable cloud-based solutions with much faster time to market, allowing them to capture the seemingly endless possibilities in the connected automotive ecosystem of the future.”

“Connectivity is reshaping the future of transport, and Ericsson is right at the heart of this with our IoT Accelerator platform that underpins the connected automotive ecosystem,” said Niklas Heuveldop Head of Technology & Emerging Business at Ericsson. “We will work closely with Zenuity to develop a truly end-to-end offering that enables higher levels of safe driving through ADAS and AD software and functions.”

Dominique Bonte of ABI Research reckons this is a significant win for Ericsson. “Ericsson looks set to benefit from the partnership, as this will expand its automotive connectivity platform beyond basic telematics/infotainment through deep integration with ADAS and driverless solutions and align the company with two global market leaders in vehicle safety and autonomous technology,” he said.

“In addition, this move will connect Ericsson with automotive AI leader, NVIDIA, which announced a partnership with Zenuity earlier this year. It will enable Ericsson to plug its connectivity platform into an end-to-end, scalable, and global autonomous vehicle solution which should help it to win additional OEM deals in the future, including in China where it already works with Geely (Link & CO brand).

“Ericsson has invested heavily in automotive as one of its key end market focuses by creating an independent division; the Zenuity partnership is a very important announcement for the much-plagued network infrastructure vendor, which has recently gone through a major re-organisation and cost saving exercise; however, the real proof will have to come in the form of OEM wins. The Autoliv, Volvo, Zenuity, NVIDIA and Ericsson alliance puts it in the same league as the Intel, Mobileye, BMW, FCA and Delphi constellation.”

Ericsson likes to quote a statistic that 95% of car accidents are due to human error, the inference being that we need technology to help us overcome our failings. Maybe, but what does seem clear is that automotive is an increasingly important new sector for telcos and it seems like a sound strategic move for Ericsson to be focusing on it, especially when you bear in mind that Nokia went in the opposite direction with the sale of Here.