Despite a couple of highly questionable acquisitions earlier in 2014, Facebook’s acquisition of Pryte, a Finish business with a niche in the Over the Top (OTT) content market, looks to be a very smart move, with a lot of promise.
The news of this merger appeared first on Pryte’s web site. For readers unfamiliar with the notion of OTT, and what it might mean for the mobile data market, I found the following explanation, authored by Dan York and published on the Disruptive Telephony web site to provide a useful definition: What is an Over-The-Top (OTT) Application or Service? – A Brief Explanation.
If I may use a personal example to illustrate the likely attraction of OTT content to the average consumer of high speed data services, I would characterize the level to be very high. Once consumers have the option of consuming digital content entirely in an asynchronous manner, without worries about DVRs, limits on storage, etc, they are not likely to look back. My household went through a Chromecast and is now settled on two Roku devices, which we are using every day, much more frequently than we do the cable set top boxes we also have available.
Pryte’s claims to offer providers of high speed data to mobile consumers a method of monetizing their role as the packet transport provider delivering the application direct to the customer. With Pryte enabled, a Telco like Verizon could opt to charge a premium for a specific OTT content service (for discussion purposes, say Netflix). Should the consumer opt to purchase the additional data, a Verizon running Pryte would also be able to directly assign the additional data to Netflix usage, only.
Of course, by assigning an a la carte purchase to a specific application (Netflix), the consumer is positioned in such a way both the Telco and the application provider (Netflix) can share in the revenue. What is a direct benefit of sharing the revenue? The additional cost of ensuring quality of service from Netflix to the consumer, comes off of Netflix and lands on the consumer. Netflix has already signed deals with Comcast and Verizon to purchase additional data to ensure high quality of service for its subscribers. So Pryte promises some relief to this pain, on both ends.
A lot of early comment on this deal has emphasized how it complements Facebook’s Internet.org effort and provides a method for emerging markets to pay for content as they start to consume data services. Certainly these comments make a lot of sense, but over a longer term. If the Pryte service works, as advertised, mature high speed data markets here in the US, Western Europe, and Japan could, perhaps, constitute an even quicker method of delivering revenue.
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