Communications report 2011–12 series Report 1—Online video content services in Australia
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- Wholesale content aggregators—Fetch TV
- Retail content aggregators—Quickflix
- Super aggregators
Content aggregators in AustraliaContent aggregators are businesses that offer—either directly to consumers or as a wholesale product—video content from multiple content producers as a single product. As shown in Table 6, the Australian content aggregation market is currently divided into three primary segments: Wholesale content aggregators, which sell services and access devices solely through ISPs using the Pay TV model; for example, Fetch TV. Retail content aggregators, which provide OTT services or content directly to consumers for a fee, such as Quickflix. Super aggregators, which provide services or content directly to consumers or via device manufacturers using either an OTT delivery system (for example, YouTube movies) or a specific branded access device (for example, Apple TV or Google TV). Super aggregators are global enterprises that operate in multiple areas of computing and internet activity, including email, media players, social networking and hardware manufacture.28 Wholesale content aggregators—Fetch TVFetch TV is one of the more established IPTV providers in Australia, offering a subscription television service over the internet that is sold through ISPs. In return for an upfront fee and ongoing subscription charges, customers are provided with a set- top box with recording capacity through which they can access Australia’s FTA television channels in addition to subscription channels, radio, games and PPV content. At June 2012, Fetch offered its services to customers via eight ISPs (see Table 6) who have been eager to seek a competitive price advantage over each other, particularly in the wake of Optus’s launch of Fetch TV services in November 2011. To provide Fetch TV services, ISPs must be capable of handling multicast services and for optimal viewing, offer internet service speeds of 3.5 Mbps, or 7.5 Mbps for an HD service.29 A truncated service, Fetch Lite is available to those with a broadband download speed of at least 1.5 Mbps. While Fetch TV services are most commonly delivered directly using the ADSL broadband route, since December 2011 Fetch TV services have been offered over National Broadband Network (NBN) connections by Internode, primarily in metropolitan areas.30 Depending on the service provider, customers pay a fixed monthly fee for a basic package that provides them with a set-top box with which to access FTA television, game and movie rentals. The full Fetch TV service provides access to additional content including documentaries, children’s programs, foreign language content and new release films. Several providers offer Fetch TV on a month-to-month basis with an upfront installation, though the majority provide the service on a 24-month subscription basis. In addition to the standard set-top box arrangement, Fetch offers a Mobile TV app that is free to download and allows access to ABC and SBS FTA content without charge, as well as specialised channels offering comedy and sports content. To enhance its product offerings, Fetch TV has been working with Optus to develop a service with integrated mobile and tablet functionality31 and announced in April 2012 that it would soon be offering its service over regional NBN connections using an advanced set-top box.32 Retail content aggregators—QuickflixQuickflix was established in 2003, initially as a mail delivery DVD rental service, and in mid 2011 expanded its business model to include an online streaming service for internet-connected televisions. In September 2011, Quickflix acquired the customer list and library of BigPond’s DVD and Blu-ray service, enabling it to ‘consolidate its position in the market’.33 Quickflix has been eager to strengthen its online customer base, with content is available for streaming via a broad range of platforms and devices. For a monthly subscription charge, customers can access a library of video content, primarily full-length feature films and television series that can be rented via the postal service or streamed via the internet. A PPV streaming option is also available. The popularity of the Quickflix service is rapidly increasing, albeit from a low base. In June 2012, the number of paying Quickflix customers in Australia grew by 59 per cent on the previous year’s figures to 111,391, with one in five opting for the streaming service.34 Super aggregatorsThe Australian OVC delivery market hosts two of the world’s largest super aggregators: Apple, which launched its Apple TV service in 2007, and Google TV, which became available in June 2012 after years of media anticipation. Both companies make content available to those with a proprietary set-top box, though the availability of the Google TV device has been restricted until recently to purchasers a Sony Bravia television. In late September, Google TV set-top boxes could be purchased from Sony Centres, while from October 2012 they will also be available from Harvey Norman.35 Both Apple TV and Google TV have been offering a somewhat reduced version of their global product in Australia. Until recently, the Australian version of Apple TV’s software heavily restricted access to global media content, reportedly due to content restrictions being incorrectly applied to the iTunes Store.36 This was rectified by a software update in June 2012, just before the launch of Google TV in Australia. Video content is also available direct from iTunes to Apple device users via its iTunes app, and there has been industry commentary that Apple will soon release an IETV to compete with Samsung, Sony and Panasonic.37 Google is also seeking to diversify its OVC service offerings in Australia, launching its YouTube Movies and Google Play service this year, which allows users to rent movies and television programs for a 30-day period.38 Launched in April 2012, YouTube Movies offers web users access to full-length Australian and international film content that can be viewed on an Android smartphone or tablet using the Google Play Movies app.39 There has been concern expressed by consumer advocates and in the media relating to the charges associated with accessing content via the super aggregators40, with the cost to download or stream films to Australian users notably higher in both Google Play and iTunes than to those in the United States. A 2011 Productivity Commission report into online retailing found that the disparity between content prices in Australia and the United States was likely grounded in market size and the level of competition.41 A Federal Parliamentary Inquiry into IT pricing (including software and IT downloads) is scheduled to begin later in 2012, and this inquiry will further explore the issue of possible price gouging of the Australian market.
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