Correction (May 2009):  These are now called "on top" services - wow things are happening just like I predicted!

In the last three weeks, as part of my Layers of Revenue series, I presented a content-driven business model for the broadband ISP.  I also emphasized that the key to the success of this model is for the ISP to completely “detach” from the traditional content business and focus on value-added services that support the functionality and applications that consumers want to see on the network.  What I mean by “detach from the content business” is to not position your company and your business as being a provider of just video, voice or data services which you charge for - that is what “content” is defined as today.  As a modern wireless “ISP” you now have the opportunity to charge for all kinds of value-added services on your network which “enable” the delivery of quality content to your customers. However, this does not mean that you should not participate in pure content revenue streams with content providers.  This is the topic of this week’s article – content partnerships.

The key difference in this approach is that as the ISP you do not charge your customers for content they will “pull down” over your network.  Instead you form partnerships with content providers and charge them a percentage for carrying their content on your network.  Now you have become a true channel partner for them and a way to market their content to the consumer.  Not all content providers will agree to form such partnerships; there is no worry here, because you can still get a revenue increase for the content by charging the consumer for an upgraded tier of network services (see my Layers of Revenue series of articles).

These partnerships can go even further if you start noticing a large uptake of content from a particular content source.  You could offer to cache the content locally on your servers for better performance and quality of service.  You could co-promote such content partners on your home pages available only to your subscribers.  This could continue and extend to partnerships with Application Service Providers who will deploy their apps on edge servers inside your particular network and so on.

In this model you continue being “detached” from the content providers in the sense that you are not charging for content or positioning your business as being part of it.  In my opinion this is the ISP business model that will prevail going forward.  It is important to customers that you do not discriminate and are preferential for particular content sources but more importantly it allows you as an ISP to stay on top of the ever changing world of new content and broadband applications.