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


OVC service provision beyond Australia’s borders—the international context



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OVC service provision beyond Australia’s borders—the international context


Given the global nature of the online environment, it is not surprising that recent developments in the Australian OVC market mirror those observed in other countries. At the high end of OVC provision, the global shift towards IPTV service adoption has been driven by telecommunications providers eager to develop an additional source of revenue. In early 2011, the top five IPTV operators accounted for 44.3 per cent of the worldwide IPTV subscriber base, primarily via Digital Terrestrial Television (DTT) technology.51

A snapshot of OVC services in the UK


The UK’s OVC market provides the strongest parallels to Australia’s, with a two-tier environment—catch-up and IPTV—shifting toward multiplatform service provision and a strong public broadcaster. Britain’s largest ISP, British Telecom (BT), has introduced a hybrid IPTV/DTT platform that leverages the country's popular Freeview DTT service and provides a bundled product for internet subscribers. YouView, a joint venture between broadcasters BBC, Channel 4, Channel 5 and ITV, and communications companies Arqiva, BT and TalkTalk, provides BT’s customers access to a greater range of free and paid-for content, enabling BT to compete with content-rich services offered by Sky and Virgin Media.52
Virgin Media’s digital cable service diversified into the online delivery market in 2010 via the TiVo device, offering its customers a range of content delivered via the internet including live broadcast, locally recorded files and on demand content.53 Subscriptions to the TiVo service have grown dramatically in 2012, doubling to almost one million in the six months to June and helping to offset a fall in customer numbers from its cable pay TV service.54
Virgin’s primary subscription television competitor, Sky TV, has announced its plans to launch a new IPTV service in 2012, providing sports content, movies and Sky’s entertainment channels via a range of payment arrangements, including subscription and PPV. Sky’s existing IPTV service, Sky Go, will be repositioned as a service for existing subscribers only, in a similar way to FOXTEL’s On Demand service.55
While the IPTV market is growing, catch-up television services remain the most popular means of watching full-length video content online in the UK, with 25 million people using the service each year.56 BBC’s iPlayer service achieved the largest audience at 7.4 million people in March 2012, representing 18 per cent of the online population.57 In December 2011 alone, BBC iPlayer received 120 million online requests for television programs, a 33 per cent increase on figures from December 2010. Further, the shift of its commercial arm BBC Worldwide into the international application market has seen take-up exceed one million subscribers, while digital revenues provide 12.8 per cent of BBC Worldwide’s total revenue.58
Table 9 shows that current levels of consumer take-up of OVC services differ widely across the developed world, with Australia’s usage of both high-end and low-end OVC services well behind those of the UK, USA, France and China. Across much of Europe and Asia, the OVC industry has seen dramatic growth in recent years, with the number of subscribers to IPTV services in China rising by almost 50 per cent in the year to June 2012. While catch-up television has now been accessed by one in ten Australian internet users, this figure is well behind take-up rates seen in more mature markets such as the US and France, where 37 and 61 per cent of internet users have accessed the service respectively. The possible reasons for this are considered in the next section, which considers awareness, take-up and use of OVC in Australia.
The global forecast for OVC access is one of continued growth, encouraged by higher bandwidth solutions, increased competition between providers, and the adoption of user-friendly viewing technology such as internet-enabled televisions. The industry is forecasting a shift toward OTT services, with predictions that by 2015, users of OTT services such as Apple TV and Hulu will outnumber subscribers to managed-network IPTV services two to one.59


Table Comparison of key indicators for online video adoption

Country

% broadband penetration

IPTV subscribers

(millions)

% IPTV subs growth in year to
Q1 2012


% internet TV set penetration

Catch-up television audience

(millions)

% web users using catch-up television

UK60

76

0.94

17

1161

25

37

USA

6662

9.35

21

1163

8264*

3565*

China

38.4

17.6166

4867

4468

n/a

n/a

France

50.3

12.38

17

2769

1670

6171

South Korea

82.772

5.28

32

1873

n/a

n/a

Australia

6874

0.54

n/a

1675

1.5

9.8




n/a: not available.

Note: *USA catch-up figures refer to internet users accessing full-length television shows.

Sources: see endnotes.





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