The 3 Elements of Convergence

S P Shukla The author is the member of group executive board, mahindra Group

Convergence means different things to different people depending upon their own past experience, the space they operate in, and the business goals they wish to achieve.

Many permutations and combinations which have been explored from the perspective of convergence arefixed and mobile telephony, voice and data, VoIP, internet over mobile networks, TV on computer screen, internet access on TV screen, video on mobile, education, entertainment on mobile, etc.

A common thing which emerges from this gradual and non-linear progression of convergence is the effort being made by different parts of the ecosystem to create a flexible, if not uniform, experience across 3 distinct screenscomputer, mobile, and television. While in the past, the television was primarily associated with entertainment, the mobile was associated with voice and text, and the computer was seen as the device for business or internet access. Now all 3 screens have begun to trespass into each others domain. A device-centric approach will look at taking movies or music or radio to a computer or mobile. Similarly, other non-conventional offerings are being explored for the television screen.

A technologist would look at device-centric approach as described above. A business view would emerge from the entire value chain of convergence in its elements of access, content and medium. This is the approach a business organization would take when evaluating a decision.

Access

For a user, the access implies that he should be able to reach or locate a particular service or content or information through least effort and at zero or low-cost. The companies which have developed technology-enabled solutions facilitating this access have gained majorly in revenues, profit, and market capitalization. Google as a search engine made it easy and quick to locate any item on the internet. E-bay made it easy for users to browse through a huge catalog of merchandise in different categories without visiting the shop. Specialized search sites made it possible to not only access and locate goods and services but also compare and evaluate features and prices. Hotel and airline bookings fall in this category. Similar are the examples of music, news, books, and health sites.
Social networking sites are also an example of providing access to your friends. The technology is enabling 2 or more people to connect and chat. Facebook, LinkedIn, Twitter are few such examples.

Of course, we must not forget the most basic access providersfixedline, mobile, and internet service providers. They control the pipes through which all content and services flow.

Content

It has often been said that content is the king in the story of convergence. What is often left unsaid is that the kings treasury is not exactly overflowing. Many kings are competing to reach the same audience and therefore the access provider can put 1 king ahead of another. On cable networks, the channels have to compete to be put in preferential slots. A search engine can influence a potential customer and a mobile operator can decide to preferentially promote a particular value-added service. Even in terms of revenue share, it is often the access provider who calls the shots. All revenue sharing arrangements are skewed in favor of the party which owns the customers.

Every now and then there comes a content which is so compelling that access providers do not have a choice but it is rare.

No wonder, majority of great fortunes built-in the convergence saga pertain to the kings of access domain and rarely to the kings of content.

Medium

As covered earlier, the medium of access can be segmented based on devices or on usage pattern. A usage analysis will essentially segment the consumption of services in stationary and mobile environment. A mobile environment is conducive for consumption of content of either short duration or requiring limited attention. Music or news can be heard while driving a car for a long stretch as attention needed is minimal. On the other hand, an audio-visual medium is best used in stationary mode either at home or office or backseat of a car. Screen size matters for video content but not so much for text or music or voice. The medium influences the story in convergence and vice-versa.

A content developer or an access enabler will do well to remember the consumption patterns in stationary versus moving mode so that there is no mismatch in what the potential customer has in mind and what the service provider offers.

In this brief note, it is only possible to provide a broad sketch of pitfalls to avoid while strategizing to participate in convergence boom. The customer ownership continues to be paramount in the business case and its successful leveraging by the access providers can create highly profitable revenue models. However failure to leverage customer ownership and tardiness in creating stickiness may result in an access provider becoming just a dumb pipe with content flowing through, without creating value for the access provider. Challenge remains to bring the critical elements of access and content synergistically together, while optimizing them for the choice of media preferred by the target customer segment.