NAPA, Calif. (MarketWatch) -- As voice, television, Internet and wireless services converge, the question facing the players is: Who accrues the most value?
Will it be the companies the content, such as Walt Disney (DIS) , Google (GOOG) , Viacom (VIA) or News Corp's (NWS) MySpace?
How about the network operators, such as cable companies, Comcast (CMCSK) , Time Warner Cable (TWC) , Sprint Nextel (S) , Verizon (VZ) ?
The issue was the focus of a technology retreat on Sunday and Monday in the Napa Valley wine region in California hosted by Synchronoss Technologies (SNCR) . Synchronoss makes back-office technology to provision and activate customers. While that work doesn't sound glamorous, Synchronoss appears to be firing on all cylinders as it benefits greatly from consumers who want communications and entertainment from multiple vendors.
For instance, when Time Warner Cable gets one of its cable customers to sign up for wireless service through Sprint, Synchronoss does the backend work for the cable company. Synchronoss will also be doing a lot of the order management support for the Apple iPhone on the Cingular network.
Most of the conference attendees came from the carriers of content or services, such as Time Warner Cable, Sprint, Cox Communications, Vonage. They were all there to understand how to better collaborate with one another to deliver bundles of services consumers are demanding.
In order to satisfy their subscriber base and grow, these operators know they may have to consider offering their competitors' services or risk losing the subscriber altogether.
In the language of the day, triple-play bundles refer to voice, data and video, and quadruple-play bundles add wireless as the fourth service.
Content and brands are king
Few attending the retreat made any outright predictions regarding the question posed above, with the exception of Rich Wong, a venture capital partner at Accel Partners. He argued that content players would be the big winners, if market capitalization was the measure. He pointed to the $140 billion market value of Google versus the paltry valuations of the Internet service providers which managed to survive.
Of course, if Apple's iPhone or AppleTV are as successful as the iPod, Steve Job may prove that device-makers can also be the big winners.
And, should the phone be a success, Cingular will get a big boost for partnering with the iconic Apple.
In fact, as an AT&T broadband subscriber, I may even be convinced to switch to Cingular as my wireless carrier. Not only will I be able to get the quadruple-play bundled offering -- wireless, Internet, voice, and video -- I won't have to worry about my library of music and podcasts stored in my iTunes account on my Mac. The Apple relationship certainly makes the switch to Cingular more compelling for many consumers.
This raised another question: Would partnerships with the new Web 2.0 content providers -- MySpace, YouTube, Facebook -- that have well-known brands give the network operators a leg up on one another? After all, these carriers do risk becoming dumb pipes, unless they offer something exclusive or compelling.
Social samba
Vivo, one of the leading mobile operators in Brazil with 30 million subscribers, is considering working with Google's social network Orkut. According to Roger Sole, marketing director of Vivo, partnering with Orkut could create the sticky social networking applications that could drive more usage and subscribers. Vivo has its own service called Moblog, whereby users can upload photos, but if Vivo were to create its own social network, it might prove to be a futile exercise. The alternative is to partner with a popular social network that drives people to the Vivo service, said Sole.
In the case of News Corp's (NWS) MySpace, that's exactly what Helio, a joint venture between EarthLink and SK Telecom did. Helio has some 70,000 subscribers, and it's likely the case that the connection with MySpace probably helped drive subscribers. Just take a look at Helio's homepage with MySpace all over it.
But what is working for Helio doesn't look worthwhile to Time Warner Cable's Mike Roudi, vice president of wireless. "Sprint doing a partnership with MySpace won't change the game, but if the wireless carriers build a real high-speed network, now that's a competitive threat," he said. "Whether there's a marketing relationship with Google doesn't change that."
Others agree. The carriers just have to be the "best enabler," said David Hudson, senior vice president of Telephia, a research company specializing in observing the consumption of digital content on mobile devices. "They don't need to have commercial relationships."
I have to agree with both Roudi and Hudson. My view is that partnering with a Web 2.0 company won't really matter in the long run if the network operator can't provide a reliable service.
But it certainly wouldn't hurt.
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