How Telefonica could become online video’s next big star

How Telefonica could become online video’s next big star.

It may be a big broadcaster in Spain and Latin America but elsewhere Telefonica is still primarily a mobile operator. That may be about to change as the business quietly moves to make money from how it thinks a significant portion of TV shows will be watched in the future - over live-streams.

It’s no secret that the explosion of live-streaming options has breathed new life into traditional live entertainment like sports and breaking news broadcasts. Not perturbed by the bandwidth conundrum posed by live video, Telefonica wants in on a format that accounts for more than 20% of the total video watched on Facebook. But rather than acquire a business or splash the cash on costly media rights, the telco has developed an app - Xtreamr - in the UK to try and profit from a content boom that has enthralled both broadcaster and brand alike.

Designed internally, the app lets users pay to stream live footage to their followers without the kerfuffle of having a camera crew, a field producer and other setup costs. Instead, at the touch of a button, journalists, experts, influencers or whoever else uses the app, can push live posts to their followers, whether they are watching from an owned platform like a site to a social network such as YouTube. By being platform agnostic, Xtreamr hopes to be seen as a better alternative to the likes of Facebook Live and Periscope that are locked into their respective ecosystems.

“What we’re seeing is influencers are now starting to cut out the middle man by asking themselves why they need to hire a content agency if they’ve already got the tools to do it themselves,” said Ana Cattell, head of commercial innovation at Telefónica. “With Xtreamr we were looking at how we could redevelop TV formats but also how we could reinvent the way digital content is produced.”

FreemantleMedia asked itself that same question when it wanted a way to bring some of its most popular influencers together to comment on various matches for its

Football Republic YouTube channel. Using Xtreamr, the media outlet created what was effectively a virtual roundtable that allowed the influencers in the studio to flip between those viewers who wanted to share their views live. “What we found [during the test] was that the more people were asked to participate with the live-stream then the more engaged they became,” said Cattell. “With some games we had more than 200 people trying to take part.”

Viewing numbers like this will only rise and with that the risk of some viewers doing something inappropriate on air. To insure against the stray offensive outburst or public prank, Telefonica is fine-tuning a moderator feature that works similarly to how a radio station would moderate callers for a phone-in. If a potential contributor passes an initial screening process of a few questions then they go through to a second queue of up to 20 people. FreemantleMedia’s Football Republic has been testing the feature which will likely be key to future deals of which Telefonica is currently in discussions with one national broadcaster about using the app.

“We’re talking to a lot of publications who have journalists trying to create content or get a video strategy up and running that want to do things in an agile and cost-effective way,” added Cattell. When asked why wannabe content creators would be best served to come to Xtreamr than create something like it themselves, she assured that while possible it would be far easier (and less costly) to use the app.

“We have the proprietary WebRTC technology in-house and they won’t have a platform like that,” Cattell assured. “We’re pulling from an asset that we have in-house that a broadcaster would have to invest in or build themselves.”

A Spanish broadcaster saw the benefits of this last year for its coverage of the British Grand Prix. One of its reporters had flown over to cover the race but wanted to do some live reporting without the foibles of a laborious setup. With Xtreamr, the journalist live-streamed short reports from Piccadilly Circus, London into the broadcaster’s Formula One show. What started out as an initial test, went on to become a few segments over the race weekend. It required a “30 second setup and the reporter could instantly start,” claimed Cattell. “Because the connection was so good they actually did quite a few segments where [the studio] connected with the reporter.”

However, connectivity will always be an issue,” she admitted, but claimed it hadn’t had a major impact on early tests to date. Should the app take off then it will need to come up with a solution to the latency issues spawned by the sheer volume of video being beamed across the network. Media experts have previously conceded that for these platforms to succeed in live-streaming, the experience on a mobile device has to at least be on a par with watching TV in the living room. If an interesting behind-the-scenes interview with a footballer keeps buffering during one of Football Republic’s shows, then it won’t be long before the broadcaster ditches the format and viewers scarp streaming for more traditional alternatives.

“The concept of live streaming has only really gained traction in the last year or so, thanks primarily to the launch of Facebook Live, said Dror Ginzberg, co-founder and chief executive of video creation platform Wochit.

“The reason it has risen so quickly in popularity is that it takes viewers ‘behind-the-scenes’, especially during events, making them feel more part of the action. Overall, we’re increasingly seeing either individual companies or social media platforms trying to own this space, by providing easy to use platforms that require little expertise. This is a far cry from ten years ago where skilled professionals were needed to set up an outside broadcast or someone with training created a piece of video content.”

Telefonica is still figuring out how to generate enough income from the app to make it worthwhile, with it open to discussing the matter further with potential partners. Bringing advertising opportunities into the app through pre-roll is something that’s being considered for future versions as the teleco opts to act as a so-called ‘pipe’ for existing programming in the UK rather than create its own. While some of its peers like BT use sports rights to help sell its broadband packages, Telefonica has opted for the less costly option in the UK.

“We’re trying to build more proof points so that we can create more of a business case [for Xtreamr],” explained Cattell. “Ultimately we want this to become a business from a commercial perspective. We always look at services that could become the next big segment opportunities for Telefonica.

She is referring to the 30 or so projects Telefonica is working on at any given time at its incubator unit. Some of these innovations are developed on a shorter timescale, while others like Xtreamr, which has been a year in the works, are developed over a longer period. The value of innovations such as Xtreamr are laid bare in Telefonica’s lower customer churn figures amidst its content drive. In Spain, the number of Telefonica’s pay-TV subscribers jumped from 730,000 in March 2014 to 3.76 million last June - fivefold increase.

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Seb Joseph

Hi, I'm the news editor at The Drum. Give me a shout if you have any questions about our news coverage or would like to pitch in a story.

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