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566 posts

Ultimate Geek
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Topic # 97492 15-Feb-2012 16:36
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Hi everyone,

We thought that you might like to know about an opinion piece on content issues from Allan Freeth, our CEO. It's also on our website at: Crowning King Content. We'd be interested in what you think about this issue.


Once the obsession with Internet speed wanes, many will realise that it was content – and access to it – that really mattered all along.

Content is something TelstraClear has been focused on from the start. As the country’s only triple-play (phone, Internet and TV) provider we know that having a robust high-quality network is only part of the story. It’s the content that matters.

Our cable-connected customers benefit from a consistent high-speed service. The traditional telco mind-set was that they chose a package with the speed and data cap they want and away they went.

In reality, whether on cable or copper, what customers think they’re paying for and what most telcos and ISPs think they’re selling are quite different. One’s buying content and the other’s selling access. The challenge for 2012 is to get telcos and customers to see things the same way and, as the old saying goes, the customer’s always right. The industry needs to move to providing a valued service that delivers – and in some cases creates – content. That’s a huge ask because getting content to the customer still requires access: costly wires and expensive electronics – and that cost has to be recovered.

The question becomes how to move from providing ‘just an Internet connection’ to offering ‘a home or business information and entertainment solution’. I think the answer lies in embracing that last word: solution. As we move into the ultra-fast broadband age most New Zealanders will have access to the sort of connection our cable-connected customers in Wellington, Christchurch and Kapiti are already used to.

More Kiwis will have access to reliable always-on Internet that allows them to game globally, watch and record multiple TV channels at once, operate a personal server to share and access their data from anywhere in the world, or run a web-based home business from any connected device. Each of those exciting worlds has appeal to many of us. As long as they work properly and well, and that’s where we must provide solutions and not just the access or ability.

Video content is a good example of where internet use is heading. Although New Zealanders’ are watching more user-generated video and premium online TV, we’re still near the bottom of the international league table – along with Australia. Two reasons account for this – lack of legal online content, and data caps – and both will need to be addressed if New Zealand is to make the most of UFB.

It was only a year or so ago that connected TV was still an emerging trend. It’s now here, albeit still a small segment. Online video is integrated into growing numbers of consumer devices. In many countries (but not here), Netflix is bundled with Apple TV. Almost all new TVs themselves are Internet-enabled. Overseas, the Internet is becoming a viable video source and is a threat to Pay TV providers.

It provides consumers (in other countries anyway) with choice; drives competition, and makes ‘democratic’ broadcasting easier. Just before Christmas we saw the demise of the Stratos TV channel. The cost of moving to digital transmission was cited as a key factor in the decision to cease broadcasting. We are heading to a world where TV and the Internet will be synonymous, whether wired or wireless. Without the need for expensive transmitters and repeaters, more money can be spent on content, both more and better content.

Content, along with interactivity, is also the key to the move to social TV. This integrates social networking with TV. Your mobile device acts as an all-in-one TV remote, EPG and chat. Viewers can provide instant ratings feedback, or even ‘like’ content and alert their friends and followers to it. The content creator, provider or broadcaster will be able to tailor any supporting advertising and marketing to your preferences.

The advantages are many. You will be able to self-select what you want to see and when you want to see it, rather than be forced to view what a TV programmer decides you should see.

This is game-changing stuff. Television as we know it will drastically change. For now, we are seeing studios and Pay TV operators opt for the status quo. These industries should be looking at how to provide what customers want in today’s internet world. They need to realise, as we telcos have, that content is king. They need to understand that choice in content, delivery and price packages is what customers want. Netflix has recently stated that it won’t come to New Zealand due, in part, to the restrictive content deals here.

And that is the nub of the problem our industry needs to grapple with. It’s something that my team at TelstraClear has been giving a lot of thought to: ensuring we can provide our customers with content that they value enough to buy, even if we don’t own the content they’re accessing.

I’m hoping that, in 2012, the content industry – TV, movies and music – will see the light and decide to work with telcos and provide customers with real choice at competitive prices. Together we can see in the coronation of content as king, all the while respecting legitimate copyright.

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Uber Geek
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  Reply # 581943 15-Feb-2012 16:48
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Since Christmas, we've had an Apple TV, and have loved how it has basically given us access to our own online video rental store. But every time we rent a movie (which we do quite often), we're very wary of the damage this is doing to our monthly data allowance (60GB). It would be great if we could rent this content without having to give any thought to this.

Its also a shame that getting access to legal content in this manner is so difficult down here, but that may be outside of the scope of the discussion you're trying to foster here. Its still an area I'd love to see addressed, especially WRT purchasing TV episodes to watch, or streaming music. There are some solutions out there already for some of these, but technical limitations (looking at you here TVNZ onDemand), and content restrictions (yeah, you know I'm talking about you, Rdio) mean that these services are nowhere near the level I'd like to see them.

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  Reply # 581952 15-Feb-2012 17:02
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TelstraClear: You can't even sort out a simple connection to WIX, so that customers can get fast/decent access to R2 for the NZNOG videos.

Your actions make a mockery of your words.


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  Reply # 581956 15-Feb-2012 17:14
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I think this pretty much hits the nail on the head with respect to UFB uptake and content.

However, I have to say I think TCL are being pretty optimistic thinking that Sky will be willing to work with them (or any ISP) to provide content at anything like the margins that an ISP would need without some severe threat of regulation.
Sky have a nice sunk cost investment in satellite they are getting gigantic returns from, their iSky platform is getting better and better, and datacaps are set to skyrocket if Australia is anything to go by. That being the case, why would sky need to bother working with any ISPs, giving up margin, when they can go direct to the customer via a better version of iSky when they are on UFB, and continue with satellite for the rest. Once people start getting 500GB+ datacaps over Fibre, which I can see happening in the next year or two, then why would they need unmetering?

And thinking that the content owners will want to kill the golden goose of Sky by encouraging competition downstream seems even more optimistic. Just look at how the AFL opposed the Optus ruling recently ? any damage to their exclusive rights deal with Telstra causes them to lose hundreds of millions in the future. Fact is that rights holders to sports prefer exclusive deals with a TV provider like Sky because they get more dough from them.

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Ultimate Geek

  Reply # 584768 21-Feb-2012 19:41
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So, what is TelstraClear doing this year to encourage this content?

– J

BDFL - Memuneh
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Uber Geek
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  Reply # 584769 21-Feb-2012 19:42
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TelstraClear will make Geekzone free on their network ;)

(No, this is not in the cards, but couldn't resist)

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