Content Selection as a Competitive Advantage

Jan Dawson / March 21st, 2014

Many books have now been written about how globalized our world is, so it’s easy to sometimes forget how local aspects of our digital culture still are. Nowhere is this more obvious than when looking at digital content stores, the disparity in the availability of different content around the world, and in the differences between demand for content in different countries.

Figures from the International Federation of the Phonographic Industry (IFPI) released on Tuesday include a useful reminder of how different tastes in content can be from country to country. One of the tables in its report on digital music showed the percentage of the top ten albums in certain non-English-speaking countries by domestic artists:

IFPI domestic repertoire

In these 13 countries, the range is from 50-100%, with a significant majority in each being local content. Also in the past few weeks, the BBC released its iPlayer Stats for January 2014, including the top 20 TV episodes watched on the service – all are British television programs, making the domestic rate 100% (source: BBC iStats):

iPlayer top 20 episodes

What does this mean for players in the consumer technology industry? It means in order to be relevant in providing content services in various countries, you need to not just have stores in each of those countries, but you need to secure local content. The chart below shows the number of countries in which four major players offer various content services (music downloads, movie downloads, TV show downloads, ebook purchases, app downloads and music subscriptions):

Content availability for big 4

There’s a huge variety here, with Apple having by far the largest number of countries for music downloads and movie downloads, Amazon (predictably) offering the largest number of countries for ebook purchases, and Microsoft leveraging its long-standing developer infrastructure to provide app stores in the most countries. Google comes out on top in Music subscriptions, where its All-Access Pass is now available in 25 countries, but otherwise lags its competitors.

Building up a set of international stores for content takes significant time, and it’s easy (especially for those of us in the US) to forget how few countries some of these providers offer content in, especially Amazon. That’s partly a question of acquiring the appropriate rights for distributing more global content such as apps and movies, but it’s also critically about securing the rights to relevant local content. Then there’s the infrastructure required to make all this work, preferably either in-country or somewhere close by. Building all that takes time, commitment and significant financial investment. It’s an easily overlooked part of Apple’s competitive advantage today (not to mention providing almost $10 billion in annual revenue).

In addition to geographic availability, all of the iTunes stores combined have the largest library of content, with 650,000 movies, 250,000 TV shows and 37,000 songs as of the last data released, and in most cases multiples of the catalogs available from other providers. As far as the iPhone and the iPad are content consumption devices, Apple has built a significant edge in allowing consumers to acquire content easily and legally and making it simple to get it onto devices.

Apple’s competitors also need to learn from its example. In other words, to the extent Amazon is serious about digital content, it has to not just launch new streaming services and new streaming devices, but extend its content catalogs in terms of both size and geographic reach to be competitive. The same is true for Microsoft as it pursues its Devices and Services strategy – tablets in particular are still content-centric devices, and it badly needs a better story around its content stores to make the Surface more appealing. And Google, too, appears to be investing in improving its content catalogs, announcing new countries for some services just this week. But all three still have a long way to go.

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw, a technology research and consulting firm focused on the confluence of consumer devices, software, services and connectivity. During his thirteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.
  • Sammy

    Great post.

    I think that these companies also have different contracts with all the big media companies, which alter the way media can be used.

    IIRC, with iTunes you can download a movie or TV Show and put it on any Mac, PC, or iOS devices for offline viewing. IIRC, with Amazon you have to download to the one device you plan to use for offline viewing, otherwise you can only stream it? You can’t download the whole video file to a PC or Mac and stream it to your Roku, SmartTV, Kindle Fire, or Tablet? By imposing these limitations, does Amazon pay less money to the video media owners?

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