news Telsyte, the Australian independent technology analyst firm, has released a study showing an increase in the use of subscription TV over broadband, with more than 300,000 Australian households currently accessing an IPTV service. This is equivalent to about one in ten subscription TV services presently provided.
Telsyte estimates that by 2015 more than one third of all subscription TV services will be delivered over broadband. The report calculates that the entire subscription TV industry in Australia generates around $2.7 billion for service providers. The greater part of this revenue is earned by the two largest operators, Foxtel and Austar. Other emerging credible services over broadband, including Telstra’s T-Box and the independent FetchTV service used by iiNet, Internode, Optus and Adam Internet, are supplementing the mature satellite and cable markets.
The study affords an understanding of the consumer and industry trends that are shaping the market, including the impact of the National Broadband Network (NBN). It also provides a forecast of subscription TV and IPTV connections for the major providers through to 2015, current market shares, commentary on major participants, and insights on future developments.
The report found that newer offerings like FetchTV were aligned better to the future needs of consumers. These services blend flexible viewing options for free to air TV with the capability of streaming a range of channels as well as access to extensive libraries of pay-per-view content, including new release movies.
Chris Coughlan, Telsyte’s director of research consulting authored the study, which was based on both interviews with industry executives and a wide-ranging survey of Australian consumers. Another finding from the study was that IPTV offers meet the main objections consumers have to subscription TV as being too highly priced and that ‘free to air is good enough’. Telsyte forecasts an increase in FetchTV’s subscriber volumes through its internet service provider partners, particularly after Optus was added as a reseller.
“Foxtel faces a dilemma as distribution over the NBN requires it to become a retail service provider supplying broadband access, something that its majority shareholder, Telstra, might be reticent to allow,” Coughlan said. It also faces challenges with regard to margin erosion if it follows suit with cut-down offerings, he added.