Telecom Channel: What's happening with Universal Music and telcos?
Sandy Monteiro: We've taken in a slightly different tack from what's been the standard business model. If you talk about music with a telco, in the past its always a ring tone, a ring-back tone or even a full-track download, but on a per-track basis with a telco.
For Universal we've identified that as a slightly archaic and slow developing model. We've taken a slightly different model, and we thought of the idea of partnering with a telco -- bringing in the strengths of all our assets, which means the biggest stars in the world, to a telco and say… what would you like to do with this? How can we put the power of our brand and our assets together with your marketing muscle to create an even bigger business for you and a bigger business for us.
TC: What's different about this model?
Sandy: I think we're always arguing over small change, whether you get 70 cents and I get 30 cents or I get 40 cents and you get 60 cents. It's always arguing over these small details. It's time to stop arguing over cents and figure out using our sense how to put our brains together to utilize the power of our assets to generate a bigger brand. How to make a telco sexier. How to make it more attractive than its competitor's, and how to ensure that the customer feels special and spends more on your platform using our assets.
That’s basically the relationship we have been trying to cultivate. It's a bit of a paradigm shift for a lot of the telco's because they're still very used to selling… the ring tone or whatever. So it takes a bit of time but, ever now and then, we find an individual within a telco who gets it. And then when they get it, it becomes infectious within the telco, and when the telco gets behind then the results are phenomenal.
TC: Have you got examples of the model working?
Sandy: Several. We've launched with 23 telcos around the world. And one of the best examples in Asia has been the SingTel AMPed platform. It's been a tremendous success. I think it's overreached the expectations of SingTel themselves. It's a definite revenue generator, it's a loyalty generator -- it's basically doing a lot more for SingTel than SingTel ever expected when they first initiated the program. We are probably going to be launching another three in Asia within the next 12 months. So it's working.
TC: How does the model work?
Sandy: Well, what happens is rather than Universal starting an MVNO and utilizing all our assets to generate loyalty from a subscriber, we go to a telco and say 'how about we create some sort of package within your offerings?' And for every subscriber who comes onboard, we get a share of the revenue. So the more subscribers we get attracted to this, and feel special because of the kind of relationship we have with them, the more subscribers the telco gets and the more subscribers the telco gets then the more revenue we get. So our objective is to make the telco more successful. So that’s how it works.
TC: So it's more like a subscription model now
Sandy: In a way. It's a subscription model in the sense of what it is, but the telco might offer to a subscriber for free. Telcos spend an incredible amount of money every year sponsoring events, concerts and everything else, and all they do is they get their logo on the poster for three days and its gone.
I would say to a telco, why not take all the money that you spend on things like that, and develop a program with us that allows us to utilize all our assets with you over a period of 10 or 12 months giving customers free services. It doesn’t cost you any more, the customer becomes loyal to you because they get all sorts of free benefits, and we benefit because we're getting paid for the use of our content. Everybody wins.
TC: How big is your content now, how many artists and songs have you got in that library?
Sandy: Well, we're almost 40% of the music in the whole world, so the biggest names you can talk about now -- Lady Gaga, Black Eyed Peas, Justin Bieber. I mean talk about our established artists who are legends, Bon Jovi is coming on world tour at the moment. U2. I mean, who else do you want. I mean we got pretty much a little big of everything and a lot of most.
TC: You’re a hell of a name dropper, but it's been great meeting you.