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Behind the Scenes, Changing the Content Delivery Landscape
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Jun 6, 2007, 15:56

Telecommunications will be changing the landscape of home entertainment, as more carriers look toward content as a value-added service to pipe directly into households around the world, according to Greg Jacobsen, Vice President, Telecom, Media & Entertainment Practice Lead, Capgemini Americas.  

"Most of the telcos are trying to reshape themselves as distributors of content and unless retailers can embrace digital media themselves, the telcos could very well displace their role as the primary purveyor of home entertainment," Jacobsen explains.

Jacobsen views the home entertainment business with a unique perspective, having spent the last 25 years serving the communications, IT and software industries. Before joining Capgemini, he was executive vice president of Wireless Facilities, CEO of Encoda Systems, and CEO of XOR, Inc. - an Internet integration firm.

"The traditional telephone companies are facing declining revenues; that business is eventually going away," Jacobsen explains.  "They have invested billions in broadband, and they have realized that, to offset the declining revenues from traditional voice calls, they have to make some money on content and to do that they have to compete with cable.  It won't be long before they have a significant impact on the way that content is being  delivered to the home; we are four or five years off at most."

Where does that leave the traditional home video/retail distribution network that currently drives the most profits for Hollywood and that, not insignificantly, is still a core source of consultancy assignments for Jacobsen's division?

"I've been in this business for along time," he says. "No one thing kills off everything else. We still have AM even though we also have FM radio, for example.  Everything finds its rightful place. However, today's consumers are so content hungry and they really expect to get content from anything --their mobile  phone, TV set, satellite TV device.  Overall, I think the more choices the consumer has the more activity there will be for the content holders.

"The technology is going to  make the boundaries around these traditional product groups meaningless. I think the home entertainment  groups are going to ultimately re-engineer themselves so they can exploit a variety of distribution channels. They understand that the niche they have had is being attacked. As a result, some of the studios are really embracing going  direct to market. So are some of the retailers."

Showing the studios and traditional retailers how to go "direct to market" is occupying a lot of Capgemini's time in Hollywood these days, having worked closely with Hewlett-Packard in the development and launch of their content delivery and digital supply chain enterprise.  They supported the computer giant in building its innovative content vault system, actually a massive server farm with digital ingest capabilities, which allows them to digitize content and make it available in a variety of traditional and emerging forms of distribution, from the stamping of a DVD on a huge array of Rimage disc burners to digital downloads.  HP and Capgemini worked behind the scenes in the recent launch of Wal-Mart's digital download business.

Capgemini's most significant contribution to this groundbreaking initiative was introducing the concept to the studios and engaging their support in providing content.  "The studios were watching what happened with music; iTunes was a wakeup call for a lot of people, showing them that the consumer would embrace a different way of accessing their content. When they see a major player like HP make such a big bet on this and put in such a huge investment into enabling this opportunity, it was obvious that it was time to dive in."

With such a wide variety of corporate "touch points" in the TM&E community, from the telcos, to the studios, to the cable companies and retailers, Capgemini is in a unique position to play dealmaker between the various, often competing, constituents in this changing digital entertainment scene.  "Our relationships are what brings the value to the studios.  The fact that they are now, finally, seriously evaluating the new distribution channels for their content is a significant market change that will ultimately make this dynamic period in digital delivery happen -- and I'd like to think that my team has had a lot to do with it."


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