With smartphones rapidly coming down in price, high-definition televisions getting within reach of many consumers and broadband available to most urban areas around the world, it’s no surprise that the focus is shifting from hardware devices to the software, content and services that run on them. But as you add more and more content players – music labels, movie studios, Web sites, software producers, book publishers and many more – you end up with such a mish-mash of offerings that it’s hard to keep everything straight, let alone keep things simple for the end customers. In today’s increasingly complex content value chain, there’s simply no efficient, automated way to work with trusted partners, offer value-added services, guarantee the end user experience and ensure brand integrity. For example, if you’ve downloaded a movie from Disney through iTunes and are playing it on your laptop, if the file is corrupted, whom do you tell and who can resolve it? Or what if you download music directly to your cell phone and a track is unplayable? These questions and others regarding the complicated world of today’s digital value chain will become more important, and it’s imperative that all parties involved have the answers customers need. Standardizing the Value ChainI recently read an article about how Verizon is experimenting with how to allow third parties to gain access to their networks, their back office capabilities and ultimately to their customers. For example, customers could get a widget from Facebook, Skype or maybe Twitter that would allow them to talk to a friend while watching TV. But just as Apple created a toolkit that allows developers to create applications that are only limited by their creativity, service providers – whether they are traditional phone companies or cable companies – must define a mechanism like an API so that third parties can easily gain access into the service provider’s environment. And with one standard set of APIs, anyone can create a widget or other offering that could then be supplied by the service provider. But the key is to avoid having to cut deals for each and every widget or piece of content a third party wants to send over a provider’s network. It would have to be a model similar to what Amazon has where it’s able to sell millions of goods on its own platform and also allow third-party merchants to sell through them. The Back Office AdvantageIf you think about it, what every service provider has in their back office is just about everything but the storefront. Besides that, all of the heavy lifting has already been done, giving traditional service providers an advantage like what Amazon enjoys. After all, what makes Amazon so wildly successful are its extremely easy-to-use interface, its massive inventory, its delivery and billing and its outstanding customer service that includes the ability to let you know what else people who bought a particular item also purchased.
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