Three years ago, Optus began a new strategy to move beyond the services of a telco and become a content provider.
Last year, Optus Sport went on air with the first season of the English Premier League, a $180 million investment designed to attract new customers to the telco.
This week Optus announced another major content partnership deal with National Geographic. AdNews caught up with Optus CEO Allen Lew to find out how the inaugural season went and how the telco makes money from content plays.
AdNews: How has that first season gone for you? What has it done for Optus?
Allen Lew (AL): Well, the first season from a business perspective and a customer perspective has gone well for us. I think most importantly our customers now believe that we can deliver live video in high quality HD to their big screen, to their tablet and to their mobile device. That to us was the most important. People's view that, as a telco, we have made that transition and they now believe that we can be a credible broadcaster and content provider as well.
AdNews has the figures on how many news customers Optus has snared during its first EPL season.
AdNews: What about in terms of trying to attract new customers? Are you happy with how that's projected?
AL: Yes, very happy with how that's projected. When we look at our performance in terms of market share gain in the last six months of 2017, we have outperformed the market. And of course you will see again next month, in August, when we announce our results for first quarter of this year, and you see Telstra announcing the results for the first half of this year, then you will be able to see what that has done.
AdNews: Can you share what those results might be or indicate?
AL: I can't. I generally don't know what Telstra is going to do. I know what I have done. But I think with what Telstra and us report, I hope the market will see that it's not just about building a better network but our content strategy has got traction with Australian consumers.
AdNews: Why is your content strategy so important? Why is important to do this now for Telco's like Optus?
AL: I think two reasons. Number one, telcos today are becoming very transactional and getting more and more commoditised. People talk about a network, all of us have built networks, at least Telstra and ourselves, they cover Australia. All of us can offer a price and can subsidise a handset or lease a handset but what we wanted to do was to change the image of a Telco from being just a pure connectivity provider and a price based discussion to one where we have a stronger emotional element.
For a sports fan, it's not just to give you a good network but to give you the content you love on the devices that you are used to having. For a non-sports fan, we now have Nat Geo and we are able to then tell everybody, ‘Come to Optus. Not because we have a great network and value for money but because we have the content to interest you and excite you in a very personalised sort of way.’
AdNews: How do you monetise content plays like this?
AL: We monetise it by a) getting more customers coming across to us, b) increasing loyalty and higher spend from our existing customers and c) the sort of brand image, the halo that we get, beyond just being a pure telco.
AdNews: Okay, Nat Geo is obviously a big one and important content partner. It appeals to everybody as you mentioned before. What are some of the other areas that you are looking at to build up your content?
AL: Well, I think what we want to do is, importantly, go beyond just sports to factual content, which is what Nat Geo is, and explore what other genres of content make sense for us to get involved with. Who are the brands that believe that they should partner with a Telco like ourselves on their next leg of their digital journey and then we'll decide. Of course the third important thing is what will excite Australians and then we will decide what we'll bring out there.
AdNews: Are you in talks with any other potential partners?
AL: Yes, we are always in discussion with a lot of different partners who see that customers content consumption behaviours are changing significantly and what Telco’s are doing in that space. Right now I can say we are talking to a number of different providers. Are we close to doing a deal? No. I think this is going to keep us occupied for a long time. So you can look forward to something maybe in 2018.
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