Opportunities for Content and Digital Distribution Alliances

Pearson, the publishing company responsible for numerous textbooks, fiction and non-fiction books (including the popular Penguin brand), and publisher of the Financial Times, announced this week optimistic growth figures for their first quarter of 2009. The company had a neat $1 billion in revenues, representing 26% growth over last year, and strong continued demand for their products. Of interest to technology and telecoms companies focusing on emerging-market growth is Pearson’s plan to re-invest these profits in long-term growth opportunities in digital businesses and emerging markets.

Pearson is representative of a number of companies in the publishing, healthcare, tourism, education, entertainment, media, and financial industries that have seen their potential market expand broadly and rapidly due to the phenomenal growth of digital technology in the last decade. As computers, mobile phones and Internet connectivity become more and more accessible in developing countries, the challenge has shifted to delivering appropriate content at the right price and with the right business model. This results in a powerful and potentially lucrative alignment of interests for content owners and companies that manufacture devices or manage networks.

Mobile operators, software companies, and PC or handset makers looking to bundle content into segment-specific devices all have much to gain from companies that create and own content with a strong brand and proven market value. In addition, many of these companies possess critical market knowledge in several key verticals – health, education, publishing, finance, and the public sector to name a few. The potential benefits of such an alliance are also clear to the content owners. Hardware manufacturers, operators and software companies can speed market entry, assist with product development and help solve the riddle of distribution and monetization of content. Partnership also offers a distinct competitive advantage for multinational corporations in both the technology and “content” industries. Local competition in most countries is small and fragmented, and effective technologies and business models that multi-national firms create in one country or region may transfer well to other emerging markets, further accelerating growth for both parties.