news The nation’s biggest telco Telstra has rejected a report by The Register claiming that it is expected to shut down its T-Box IPTV streaming video platform and shift its 300,000-odd customers using the platform to the Foxtel pay TV company it part owns.
The allegations surfaced yesterday in a report by The Register, which stated that there was a “long-held understanding” between Telstra and Foxtel, which Telstra part-owns as part of a joint venture structure, that Telstra would “abandon the pay TV playing field” should Foxtel take over its rival Austar, which it is currently in the throes of doing, as part of a $1.9 billion deal announced last year.
Telstra chief executive David Thodey reportedly said in April that Telstra would consider increasing its 50 percent stake in Foxtel, following reports that James Packer’s Consolidated Media Holdings could be interested in selling its 25 percent stake in the company (News Ltd also holds 25 percent). However, the Telstra CEO also noted that such a move would likely be subject to scrutiny by the Australian Competition and Consumer Commission.
The article further alleged that new Telstra Digital Media chief Rick Ellis was interested in dumping the IPTV strategy and buying a stake in a traditional media company such as the Nine TV network, and that Telstra’s director of IPTV Ben Kinealy had announced his departure from the company. In response, a Telstra spokesperson this morning said there was “no truth” to The Register’s T-Box report, apart from the fact that Kinealy was leaving.
It’s not clear why abandoning the IPTV space would benefit Telstra. Over the past several years, the company has garnered a larger local audience for the platform, which is only available bundled with its broadband offerings and not through other Internet service providers, than other competing solutions available in the nascent Australian internet video space such as FetchTV, which is used by most of Telstra’s broadband rivals, and Quickflix, which has recently launched an online streaming option to complement its DVD rental service.
T-Box subscribers are able to stream Foxtel to their T-Box IPTV devices already, as well as access a wealth of other content via streamed or on-demand channels. In addition, it is common for the telco to sell access to broadband and Foxtel bundles in partnership with the pay TV giant already.
When I read The Register’s article on this subject last night, I thought it was a pile of hogwash, and it looks like I was right. While Australia’s IPTV market by most measurements is still in its infancy, Telstra has achieved the most out of the major players so far with its T-Box initiative. Its platform has the most customers, the most content and the best user interface out of all the majors. Plus it already has added benefits such as the availability of streaming Foxtel, to boot. I know of quite a few households which speak highly of their T-Box; the same cannot be said for FetchTV and Quickflix.
It sounds to me like The Register has spoken to someone aggrieved within Telstra’s Digital Media division who has spun them a story based on rumour and innuendo, coupled with a small amount of fact, such as the departure of Ben Kinealy. But this doesn’t excuse publishing this sort of stuff. Quite frankly, I note that nowhere in the article has El Reg asked a Telstra spokesperson for comment on the issue. If they had, they would have no doubt received the same response I did: That there was no truth to the rumours.
Yeah. That’s right. The Register doesn’t appear to have fact-checked its article in the slightest, despite the fact that it’s based on information from un-named sources.
It is true that Telstra’s new media operations are constantly undergoing renovations; moves, adds and strategy changes have been par for the course for the telco in this space over the past decade, as Telstra has repeatedly tried and failed to get its head around the revenue opportunity from new media.
It might still be a minor part of Telstra’s business. But in that context of constant change and many failures, I have no doubt that T-Box is viewed within Telstra as a success. It would make no sense for the organisation to simply dump the platform now and shift the customers on it to Foxtel. 300,000 customers on an IPTV platform in Australia are not easy to come by, and I would suggest that any attempt to abandon this initiative would meet a fairly stiff response from a number of senior Telstra executives; including the telco’s CEO David Thodey, who has talked it up many times over the past several years.
Image credit: Telstra