Australia broadband rising on content tide
EmptySYDNEY -- The Australian market for movie and TV downloads and video-on-demand services is on course for a dramatic boost this year as new players make a concerted marketing push to win consumers over as key film and TV content becomes more readily available.
No less than three top providers servicing Australia's 3.4 million broadband customers will have significant broadband-based movie download rental and download-to-own services available beginning in 2007, while Australia's TV networks are dipping their toes in the broadband waters by offering limited downloads of locally produced programs.
Australia's largest telecom, Telstra Corp., has something of a first mover advantage in the space with its BigPond Movies download service offering library product from Sony Pictures.
Telstra won't give figures for buy rates or downloads but BigPond has been gradually building up its content during the year -- signing a deal with Warner Bros. for its movie library last month, inking its first exclusive TV supply deal with BBC Worldwide and providing episodes of new Network Ten drama "Tripping Over" for download each week.
Bigpond is eyeing deals with another 50 or so content partners, Telstra spokesman Craig Middleton said.
BigPond's new rival, Reeltime Media, has inked a marketing and distribution partnership with Yahoo 7 -- the online joint venture between Yahoo and the Seven Network here. Reeltime has new release and library deals with 20th Century Fox, Sony, MGM, Universal Pictures, Palace Films, Icon, Granada and Playboy. It also claimed a world first recently with the launch of a download-to-own service that will offer Universal titles day-and-date with their DVD release. Michael Mann's "Miami Vice" will be the first available DTO title in this market.
The deal with Yahoo 7 will give Reeltime access to Yahoo 7's marketing clout and its 5.6 million users in Australia and New Zealand, potentially boosting its revenues by an additional AUS$33 million ($25 million) a year if just 10% of Yahoo 7's users download one movie each month, the company estimates.
Meanwhile, pan-Asian IPTV provider Anytime On Demand has also inked deals with 20th Century Fox, Sony, Warner Bros., Universal, Disney, Celestial Pictures, Icon Film Distribution and Becker Entertainment and is rolling out its service via ISPs around Australia as well as other markets in Asia.
In other signs of a major uptick for the sector, pay TV provider Foxtel reports that it has sold more than 17 million movies to its 1.2 million subscribers through its near-VOD Box Office service in the almost three years it has been operating.
Foxtel said the results were encouraging enough to provide some of its key TV programs on demand via a special channel through its personal video recorder and will launch a subscription video-on-demand service later in 2008.
Those plans fall into line with other Australian TV networks, which are making tentative steps into the download market with a dozen or so locally produced programs available as downloads, mostly from the public broadcasters. At the same time, the commercial networks, each of whom have specific online strategies, are waiting for a clearer picture from their studio partners about how they'll proceed in this market.
"We are accelerating our plans online with the use of streaming video, but holding us back is the lack of broadband speeds and the studios," one senior network executive said. "Do they want to create their own thing or work with local media partners here who can extend the broadcast experience and use (the networks') marketing platforms to push people online?"
That issue will pan out in the next 12-18 months, he predicts.
A long-term view for the sector is being touted by DVD rental mail-order company Quickflix, which is developing its online plans with some heavyweight investors -- including former News Corp. scion Lachlan Murdoch and Bruce Gordon's Win Corp.
"Our plan is to launch digital movie downloads when sufficient consumer demand and service quality is apparent," CEO Stephen Langsford told shareholders. "However, the lack of content coming from film studios, slow broadband speeds in Australia and low consumer acceptance will slow take-up of video-on-demand for at least the next five years."
Rupert Murdoch also points to the long-term needs for the sector. He told News Corp. shareholders in Australia last month that Australian broadband speeds were a "disgrace."
"When you have broadband -- real broadband, where you get, say, 20Mbps of data into your home -- it changes everything. In Australia we only have a couple of million (people on broadband) and they don't even get 1Mb(ps)," Murdoch said.
He said that the government and Telstra should be spending "$10 billion or $12 billion on it (to reach) every town in Australia. They do it in Japan, they do it in South Korea, we should be able to do it here. We are being left behind and we will pay for it."
Murdoch's call came as Telstra announced it will increase its broadband speeds to between 8 and 24Mbps in key centers, improving download speeds to about seven minutes for a two-hour movie.