Although consumers have been enjoying the benefits of Over the Top services, many businesses, including telecoms companies and media houses in the Caribbean region, have experienced declining revenues that ultimately, threaten their long-term viability.

 

You may not have realised it, but the term Over the Top services (OTTs) truly came to prominence in the Caribbean region around five years ago, when some telecoms companies had blocked certain mobile/cellular applications and services in countries across the region. Although access was subsequently restored, and the furore died down, mobile/cellular giant, Digicel, in particular, has been, and continues to be, a strident advocate for Caribbean governments to tax OTTs.

As owners and operators of mobile/cellular networks and telecoms infrastructure, Digicel and other telecoms companies are of the view that OTT platforms should not be able to connect to their customer base for free. They argue that they, the telcos, are the ones that not only provide access to consumers, but also maintain and build out their networks to meet the bandwidth demands of OTTS. Hence cognisant that it might be near impossible that they to be compensated by the OTT platforms directly, the telcos have been advocating for governments to levy a tax on OTTs, which essentially, would make the playing field more equitable.

It was thus interesting to read in articles published last week that non-tech businesses in Trinidad and Tobago, were also proposing that Facebook, along with other social media platforms be taxed. Norman Sabga, chairman of ANSA McAL, which owns Guardian Media Limited (which includes a daily newspaper, a television station and a radio network) plus other companies, and

… in the context of the $1 million loss by Guardian Media Ltd., said Facebook, Twitter and other international companies were able to sell media (and other services) in T&T without paying taxes, have no employees on the ground—a huge advantage to them—and when paid, they receive foreign exchange. This undermines the local media houses.

(Source:  Trinidad and Tobago Express Newspaper)

 

The impact and loss is real

Without a doubt, the Internet has ushered in a new paradigm, which has affected not only consumer behaviour, but also our wants and expectations, plus how we process and perceive things. Thanks to the innovation and appetite for risk of certain platforms, they have become global brands, with which we, consumers, cannot do without, and for Caribbean consumers, were expect to be to access them in the region.

It must be emphasised that the clout and impact of these platforms, such as Facebook, Twitter, WhatsApp and Netflix, to name a few, becomes evident due to the size of their customer base, which range in the hundreds of millions. In Caribbean countries, the customers base for social media platforms, and especially Facebook, tends to exceed that of local media houses. As a result, those overseas-based services typically have the largest audience locally, can be more influential than the local media businesses, and so are able to leverage that influence to their benefit. Hence, it should thus not come as a surprise that to a considerable degree, revenues traditional media used to generate has taken a hit, thanks to social media.

 

Initial complacency about OTTs

However, attention must also be drawn to the fact, that to some degree, many businesses, especially Caribbean businesses, did not fully appreciate the impact of OTTs, and so, might not have taken the threat seriously.

Businesses would have gleefully enjoyed  their lower phone bills, tanks to free calling and instant messaging via Viber, Skype, and WhatsApp, and ability to expand their reach with Facebook and Twitter. At the same time, many internationally-recognised media houses were in the process of revamping the business models – in the face of competition from social media, due to loss of advertising revenue, and the changing ways in which individuals consume news.

However, in time, as the reach of OTT and social media platforms grew, the proverbial chickens came home to roost. Unfortunately, by the time businesses in the region realised their impact, considerable ground had already been lost.

 

The need to outside the box

Finally, it must also be emphasised – although it has been said before – Caribbean businesses, particularly those that believe that they have been adversely affected by OTTs and social media, need to become innovative and revamp their business models. Many of them, such as our media houses, still want to hold on to selling advertisements as their main source of revenue. However, they may not be seeking to leverage technology to ferret out diversify their business, and to develop additional value or services, that could offset some of the perceived benefits of their competitors.

Hence, it is not enough to just grumble about the difficulties that are being experienced, and expect governments to level the local playing field in an increasingly  global market place.

 

 

Image credit:  Pixabay (Pexels)