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Vodafone shields itself from Telefonica

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Avatar for SaifAnsari
Written by   26
1 year ago

Vodafone got off the football boat in the summer of 2018. The former CEO, Antonio Coimbra, defended time and again that the numbers were not coming out due to the high price of broadcasting rights. His bet was series and cinema, after having reached agreements to integrate the offer with practically all platforms. But do the numbers come out? "We were selling football for between 15 and 20 euros per client per month; there is not that much difference," said the 'boss' of Vodafone TV, Ignacio García-Legaz, who insisted that, despite being tighter , the margin is "pretty healthy". How is it calculated? He explained that revenues are based on a negotiated percentage depending on the volume of clients that you attract for these platforms. "If you buy a lot from me, I'll give you a good price ... like wholesale purchases," the manager pointed out.

In a pay TV market dominated by Telefónica, Vodafone has added almost 100,000 audiovisual clients from the beginning of 2017 to the first quarter of 2020, according to data from the CNMC. In the second quarter it has added 57,000 more to touch 1.5 million. And what does it mean for HBO? Logically, transparency is zero in the data, thanks to current regulation. As you do not have an establishment in Spain, the law does not oblige you to report the number of clients and income in order to contribute to European cinema. According to the estimates of Telefónica and Atresmedia itself, reflected in the report of the European Commission with which it approved the joint-venture of both, it has 10% of the market compared to almost 60% of Netflix and 30% from Amazon.

HBO is the third major video-on-demand platform in Spain after Netflix and Amazon Prime. It landed in 2016 at the hands of Vodafone, with an exclusive agreement that has been extended and has become a particular weapon of the British telecom compared to the rest of its rivals, such as Telefónica, who aim to include the owners of series like Watchmen or The Wire. This union between the two companies will continue at least until the end of 2021. In this way, the operator shields itself from potential negotiations by other market players and keeps them away from the war for content.

Telecommunications in Spain are experiencing a mature moment. Connectivity has become a 'commodity' and operators seek to enrich their offers with new services with which to extract more value from contracts with their clients. In this new strategy, content and pay TV have played a fundamental role in the last three years. Companies have embraced the video giants to introduce their subscriptions and charge a commission for it. Vodafone itself did it in 2015 when Netflix landed in Spain, being the only one that integrated it in the first months. Later, the US company opened up to other telecos and even reached more in-depth agreements with Telefónica. With HBO this did not happen.

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When the owner of historical series such as The Wire, The Sopranos or Game of Thrones decided to follow in the footsteps of her main competitor in Spain, she repeated the same path: she went to Vodafone. The latter signed an exclusivity agreement: no other telecom could count on the television offer integrated into its decoder. It was multi-year and had a significant cost, especially when it came to promotion. The numbers were not made public. The British had to spend a very significant marketing budget promoting not only the service itself, but also large series launches. Despite the 'boom' of these services and competition, the multinational decided to stay with the operator. In the latest renewal, as confirmed by various market sources, the deadline was at the end of 2021. That is, there is still a little more than a year ahead in which the rest of the rivals will have to stay on the sidelines.

From Vodafone they do not want to make any comment. In other words, the clear objective on the part of the British is to continue maintaining this relationship beyond the expiration of the exclusivity. The key is whether the other party wants to too. Suitors have not lacked him in this time. Other operators, such as Telefónica, have held conversations -as with Amazon- at this time to assess possible integrations. In the case of the one chaired by Emilio Gayo in Spain, its intention has always been to be a 'platform of platforms' and to add the offer of all of them in its packages and, obviously, it would welcome this alliance to be undone. Today it has Netflix and has tried to do it with Amazon, although in the end no pact has been reached - you have to integrate the full Prime subscription and not just Prime Video.

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Written by   26
1 year ago
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Comments

Incredible post buddy

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1 year ago

Nice post

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1 year ago

I never had vodafone my dear

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1 year ago

Very wonderful post

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1 year ago

HBO is the third major video-on-demand platform in Spain after Netflix and Amazon Prime. Nice article.

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1 year ago

I never had vodafone

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1 year ago

Wonderful

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1 year ago

Great article dear keep it up

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1 year ago

Amazing article by you my friend

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1 year ago

Nice article, you have my support.

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1 year ago

great article my friend....it was nice reading

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1 year ago

Excellent article

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1 year ago