Here's more proof of why that is smart, very smart. In a statement issued by broadband provider Hong Kong Broadband Network (HKBN), as reported initially by Gigaom, the company stated that it "embrace[s] Over-The-Top (OTT) content providers who help fill up our excessively Big Fat Dumb Pipes. We happily co-exist with OTT providers ...."
Now THAT's the spirit! Why? Because the margins for providing broadband are significantly higher than margins for providing cable content packages themselves. For HKBN, it reported a healthy 17.5% return on equity.
As HKBN points out, its broadband biz benefits brazenly by the beautiful bounty of accelerated growth of online video -- which requires fatter and fatter pipes. The more compelling content that is out there, the more consumer demand for fatter pipes. And, the fatter the pipes, the more creation of compelling OTT video content.
It is a beautifully synergistic world. Kumbaya!