Delivering digital content has been a topic of much discussion in South Africa for the last couple of years, as users have better opportunities to connect to the internet. In in doing so, they expect to receive more and better digital services.
But Gartner analyst Will Hahn says that while there is definitely an opportunity for providers to earn a revenue from digital services, it is a two-way opportunity. He argues that services can come from you, and not just to you.
But there is also the money issue. Digital services are still in a very fledgling stage in South Africa, and Hahn says that the revenue that Content Service Producers (CSP) will derive from it will not be enough – but they will be coming anyways.
He postulated that there are certain areas in which CSPs will have a great market share, and one of them is IPTV. “If you look at the share that IPTV and Video on Demand can have, it will be about 41%. The other areas in which they should focus in the future should be mobile payments and machine-to-machine services.”
He added that the ill-fated Telkom Media was the right idea and was a good play, but ultimately it didn’t work out for Telkom. “In South Africa you can’t always get it right,” he says, adding that “the pressure is coming in for mobile data, as it is a bit like betting in Roulette. You can bet all over the board and you’ll have mixed returns, but there will always be partial losers.”
But providers should be put off by the revenue that digital services will produce. “Digital Services Revenue is a very small slice of the pie, but it is growing incredibly fast. Out of the Top 10 CSPs in the US, the DSR for them is very low, but the growth has been at around 18% – digital revenue is where it’s going to be at.”
Charlie Fripp is a guest of Gartner at its annual Symposium in Cape Town this week.