Telus Sidesteps the TV Content Wars

It’s smarter to stay on the sidelines of the TV content wars.

The Telus strategy in the content wars is to let the other guys beat each other to a pulp.

Telus chief Darren Entwistle brought some sanity to the telecom industry during a recent speech in Toronto.

Entwistle told the Bay-Street-heavy Canadian Club that Telus Corp. wouldn’t join the telecom content frenzy that’s happening in Canada.

Telecom carriers like Shaw Communications, Rogers Communications and BCE Inc have been fighting each other like housewives at a bargain basement sale for media properties. Shaw, the cable giant that has moved into telephone delivery and is launching cell phone service late next year, has snapped up the bankrupt Canwest television arm. BCE, which owns the Bell network, took full control of CTV. Rogers has applied for 10 more specialty TV channel licenses.

Presumably, all three figure they can put the TV content on their telecom delivery channels – for a price, of course.

Content hoarding on the horizon

As Entwistle indicated, this might lead to “content hoarding” in future. This is the concept that, if regulators loosen the controls on who owns content, they can store the content they develop or own and sell it only to their own subscribers.

Instead, says Entwistle, Telus is going to continue its strategy of expanding carrier channels as partners to content providers.

Essentially, it’s going to be the telecom industry’s “Switzerland” – remaining neutral so it can serve everybody.

It’s not a bad strategy. There is the possibility that if Shaw, Bell and Rogers beat each other up enough, they may eventually have to settle on a neutral carrier to deliver their content. They’ll distribute it through “Switzerland” – Telus – to show regulators that they aren’t really controlling content.

On the other side, by avoiding the costly expansionism of the telecoms, Telus avoids a repeat of the content wars of a decade ago when television companies were buying newspapers to feed their need for content. The two industries being wildly different, it never quite worked. Just ask Canwest.

The third strategy

Telus is also trying to get into the television game – but as a simple distributor. Other carriers will likely try to somehow force buyers to take their content, either through bundling, or some other form of packaging.

By letting consumers pick what they want, Telus may be holding a very important card in the game that is television content in future.  

In an iTunes world, it’s almost anathema to think you can force consumers to buy your stuff. Music providers tried it – i.e. package 12 tunes, only one of which was interesting, on an album – and it didn’t work. File sharing all but destroyed the industry until iTunes created a system in which consumers could buy individual tracks. Now the movie industry is facing a similar distribution problem.

Looks like soon, the Canadian TV content distributors will be asking the same questions.