Deutsche Telekom promises investment in original content

deutsche telekom-logo-roofDeutsche Telekom is planning to invest in original scripted content from next year and has set funds aside for the project, according to Niek Jan van Damme, managing director of the telco’s domestic German arm, Telekom Deutschland.

Speaking on the opening panel at ANGA COM in Cologne, Van Damme said that Telekom took the view that investing in the right exclusive content makes sense.

“It would be lovely to have something like House of Cards. It is risky and expensive but in Germany and Europe we are focusing on offering exclusive content,” he said. “A few millions have been reserved. We will start properly in 2018. [However,] we will start cautiously and reasonably because we see the risks.”

Van Damme said that Germany is a smaller market than the US, so the risks had to be mitigated. He said Telekom would also look to acquire content from abroad as part of its strategy.

“We want to offer content to our customers on an exclusive basis,” he said. He added it is necessary to differentiate in a world where there is lots of competition in delivering TV, all with a good UI.

Telekom’s upping of its investment in local content comes as pay TV rival Sky is also ramping up its activity in scripted drama, including the forthcoming launch of period crime drama Babylon Berlin in the autumn. The flagship drama, set to air from October 13, is the most expensive series that the company has produced to date.

Speaking on the ANGA COM panel, Sky Deutschland CEO Carsten Schmidt said that the series represents the fruits of cooperation between several companies, and added that Sky would produce a number of original series as it pivots away from focusing purely on sports. He said he was confident that the show would generate a lot of buzz ahead of Christmas.

Other network providers at ANGA COM were more sceptical of the value of investing in exclusive content.

Vodafone Deutschland CEO Hannes Ametsreiter, also speaking on the opening panel, said that moves towards securing exclusive content, including sports rights, had proved counterproductive in a number of markets.

“There were some trials in Portugal and Spain. One provider acquired content and we followed and at the end of the day everyone paid €300 million. We keep thinking about it but at the end of the day it doesn’t provide great strategic value,” he said.

Ametsreiter said he is more interested in other ways of differentiating Vodafone’s offering, including providing Internet of Things and smart home products, rather than a strategy of investing in exclusive original content. “Limiting content to a specific channel means that prices will keep going up. This is not a very wise strategy,” he said.

Ametsreiter said that his company did invest in content more broadly and had partnered with a number of other content providers, including Netflix. He said that Vodafone had a large number of different TV channels and had the speed in its network to support the consumption of content from multiple sources.

Tele Columbus CEO Ronny Verhelst, also speaking on the panel, meanwhile said that he was “not a strong believer” in exclusive content, which he said is associated with instability of the market. He said that exclusivity was not good for the end consumer.

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