Over 300,000 Australian households access IPTV

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.

Image credit: Volker Stock, royalty free


  1. With respect to Foxtel and the NBN, I really don’t think that they will end up using it for distribution of their full product suite.

    The fibre network will cover only 93% of the population, so they will still need to be utilising their existing satellite DTH product to be able to deliver to the other 7%. Since they will need the satellite transponder space to serve that 7%, they may as well continue using it for the 100% footprint – it won’t cost them any more.

    I don’t it will get to the point where they need to consider whether or not Telstra would appreciate them doing it over the NBN or not.

    What is far more likely, is that existing RSPs will deliver IPTV service over the NBN by making deals with individual channel providers.

    Very few of the channels on Foxtel are actually owned by Foxtel. Providers like XYZ Networks, Premier Sports, Showtime Channels, and Movie Network – (amongst others) – all provide channels to Foxtel for distribution.

    A single RSP might deliver an IPTV product that contains the FTA channels, and then add others. They might strike a deal with Premier Sports to include Fox Sports 1, 2, and 3, Speed Channel, Fox Footy, and Fuel TV.

    Then strike a deal with Australian News Channel to add the Sky News suite of channels, and a deal with Showtime Channels for their suite of movie channels.

    And that might be all they offer. Foxtel themselves might never need to be involved. They would just be deals between the RSPs and the channel providers.

    • I am not sure what about the NBN forces foxtel to provide broadband services in order to provide foxtel.
      If anything it is similar in nature to the way Foxtel Cable currently operates.

      Foxtel have the “capacity” to provide broadband over cable, but instead Telstra is the only company that does. Foxtel might have to sign up to NBNco to provide services … but in all likelihood given Telstra’s close relationship, they will piggyback off Telstra’s agreements with NBNCo.

      I really don’t understand that last paragraph, perhaps someone can explain it to me.

      This is all before – as you say Michael – the channels themselves aren’t glued to foxtel. With the bandwidth provided by the NBN we could potentially see many many more IPTV services, some of which will obviously host current content, but I suspect a lot more of the smaller channels from overseas will find a market. (any-market is better than no market right?)

    • A single RSP might deliver an IPTV product that contains the FTA channels, and then add others

      A lot of this actually hinges on the appeal made by the AFL/NRL/Telstra against Optus and online broadcast rights. Should the appeal go through and the copyright laws changed it would mean that in some instances (those where an online broadcast arrangement has been made) it would be illegal for a RSP to stream what is being broadcast on FTA.

      What would be good is to see the RSPs expand on the current channel availability on Fetch/T-Box/whatever, and to see currently offshore channels be available. Maybe something like HBO become an available channel for paying subscribers and the like.

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