Communications report 2011–12 series Report 1—Online video content services in Australia

The future of online video services in Australia

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• NBN rollout
• New OVC access devices
• Increased wireless speeds
• Regulatory considerations

The future of online video services in Australia There are a number of current and impending developments that are likely to facilitate the growth in use of OVC services market in Australia. As seen recently, continued improvements in internet speeds and innovations in end-user access devices have the capacity to change consumer behaviour, particularly in the area of mobile communications. However, while almost half of Australia’s online population had accessed OVC, intention to access OVC among those yet to do so was low, at 12 per cent.94 Improvements in access devices and data delivery speeds may provide the impetus needed to stimulate additional consumer take up of OVC. Consumer demand for viewing video content at a time and place convenient to them is likely to foster the continued growth of both fixed and mobile OVC viewing, especially among those aged under 35. This section outlines some of the developments that are anticipated to have the greatest impact on the online video access environment, whether in the area of subscription IPTV, PPV or OTT catch-up service market. NBN rollout The rollout of the NBN is predicted to have a strong impact on internet viewing habits in Australia, as superfast download speeds enhance service availability and the online video viewing experience.95 With a service speed significantly faster than an ADSL connection, the NBN is expected to provide the majority of Australian households with the ability to access additional net-based communications channels much quicker. NBN Co launched a ‘multicast capability’ for its fibre product in the third quarter of 201296 that is ‘designed to enable service providers to deliver high-quality video over the fibre footprint’. According to NBN Co, the multicast service’s network architecture design will enable more efficient and economical delivery of IPTV services to fibre-connected end users.97 New OVC access devices Take-up of IPTV is likely to be further encouraged as more devices are equipped with ‘smart’ technology, where functionality is built into the device rather than the network. Apple, Sony and Samsung are among a myriad of device manufacturers that are investing in this area of technical innovation, enabling consumers to connect to an OVC service at the touch of a button. As more online video access devices are introduced to the market, competition from low-cost manufacturers and downward price pressures will enable more consumers to add to their suite of internet technologies, in turn potentially encouraging the take-up of online video services. An example of this trend can be observed in the area of IETVs, whose prices have fallen dramatically in recent years. With internet connectivity adding little to the price of a wide-screen television, it is likely that consumer adoption of smart televisions will continue to increase, exposing more users to the online video environment. Increased wireless speeds As outlined in a number of recent reports by the ACMA, the increased popularity of wireless internet access in Australia is likely to continue with the rollout of user-friendly devices, higher data speeds and more generous data plans.98 Wireless service speeds are increasing, with the LTE (4G) network anticipated to improve internet download and streaming speeds by up to 25 times those of 3G services at their launch.99 First released in Australia by Telstra, 4G services are now being offered by others, including Optus and iiNet100,101 While 4G coverage in Australia is currently largely restricted to metropolitan areas and a few regional centres, Telsyte has forecast that there will be almost seven million 4G connections by 2016, accounting for 19 per cent of the market.102 The adoption of 4G technology by Australian consumers is likely to encourage an increased take-up of mobile television services, especially of the longer, high-definition videos such as films and television series. It is also likely that, with the continued rollout of 4G services, the capacity for providers to offer live events to mobile audiences will increase, potentially enabling consumers to view live concerts, sports games or newscasts whenever or wherever it is convenient.103 Access to such a large new audience could impact the business models of a range of Australian industries, including communications providers, performers, and event promoters. Regulatory considerations While the continued development of the OVC services market presents significant opportunities for the growth of the digital economy in Australia, the increased development of internet-distribution channels is likely to pose challenges to existing media regulation, for example as raised in the ACMA’s Convergence Review in 2012.104 In contrast to traditional free-to-air broadcasting channels in Australia, internet-based distribution channels are not currently subject to local content quota requirements, as defined by the Australian Content Standard 2005. The reportedly higher production costs of locally made, Australian content in comparison to international programs suggests paid-for OVC services being largely centred on the provision of access to international content for some time to come. This may have significant implications for the availability of Australian produced content on subscription IPTV and OTT pay-per view services where the cost of acquiring content has direct implications for the cost to the end users and the sustainability of the business model of the service providers. This is less likely to be the case for catch-up services provided by FTA broadcasters where the provision of content online is an extension of normal FTA broadcast schedules and made freely available to audiences. While not subject to regulated content requirements, FTA catch-up services are likely to maintain a much higher level of local content, potentially creating a differentiation of ‘cultural content’ from paid-for OVC services. However, access to premium Australian content, such a sports and movies, may prove critical to the development and control of the subscription/PPV OVC market in Australia, particularly where content rights are held for considerable periods of time. As demonstrated by the Optus TVNow case of 2012, such rights are strongly protected and are likely to limit the number of international OTT providers seeking to challenge existing content licensing arrangements. Directory: media -> Research%20and%20Analysis -> Publication -> Comms%20Report%202011%2012 -> Word Word -> Communications report 2011–12 series Report 3—Smartphones and tablets Publication -> Report 3—The emerging mobile telecommunications service market in Australia Research%20and%20Analysis -> 5G and mobile network developments— Emerging issues Research%20and%20Analysis -> Chapter 1 Broadband services Research%20and%20Analysis -> Communications report 2013–14 series Report 2— The evolution of Voip in Australia June 2015 Canberra Research%20and%20Analysis -> Communications report 2011–12 series Report 3—Smartphones and tablets Download 0.5 Mb. Share with your friends: