Communications report 2011–12 series Report 1—Online video content services in Australia
Australia’s free-to-air broadcasters
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- Subscription television—FOXTEL
Australia’s free-to-air broadcastersAustralia’s FTA television broadcasters have recognised catch-up television as an important way to reach and maintain audiences and as a valuable source of additional advertising revenue. As internet access technologies multiply, content owners and broadcasters are exploring the opportunity to offer services over multiple screens, with the majority offering content over mobile and fixed devices (Table 4). Since 2010, Australia’s FTA channels have provided catch-up television content to viewers free-of-charge, with the exception of metering charges applied by the viewer’s ISP. Content offerings vary between broadcaster sites, with the highest being offered by the Nine Network at an average of 345 hours per week, due in part to its substantial back catalogue of Australian drama.20 Audience figures for catch-up television programs are rising—an estimated 1.5 million users during June 2012 compared to just over one million during June 2011.21 Growth in usage is likely to have been influenced by lower data costs and partnerships between content providers and ISPs that have seen metering charges removed entirely for customers of certain providers. The development of formats compatible with portable media devices, such as tablets and smartphones, has enabled consumers to view its video content when not at home, further encouraging audiences to view or download OVC. ABC iView continues to be one of the more innovative catch-up providers, negotiating meter-free downloads with 12 ISPs and offering applications and multi-platform content that can be viewed on several different devices through iCloud storage.22 The Seven Network has also made inroads in this area, indicating that their business strategy is focused on ‘four screen delivery’—PC, mobile, tablets and connected television.23 Subscription television—FOXTELFOXTEL is Australia’s largest subscription television company with over 1.68 million subscribers in June 2012, primarily via a set-top box arrangement.24 At June 2012, 42 per cent of FOXTEL’s subscribers accessed the service using IQHD, a personal video recorder that enables them to time-shift their viewing practices by recording programs on both FTA television and FOXTEL schedules. This compared to 31 per cent at June 2011.25 While the core of its business model remains cable pay TV, the company has used the online environment to add value to its traditional services, offering existing subscribers (with an internet-connected IQ box or Xbox 360), an on-demand OVC service providing hundreds of films, sports events and episodes of television programs. Launched in 2010, FOXTEL On Demand and FOXTEL on Xbox 360 enable customers to download programs and movies directly via their internet access device. This includes a catch-up viewing service that mirrors that offered by FTA broadcasters. Customers are restricted to downloading only those programs that have been broadcast on FOXTEL channels to which they have subscribed. Other access technologies include mobile devices and the Telstra T-Box. Telstra has leveraged its 50 per cent stake in FOXTEL, offering bundled packages and discounts to encourage take-up of its broadband and fixed-line communications services. At June 2012, over half a million Australians (501,000) subscribed to FOXTEL via a bundling arrangement with Telstra, a drop of seven thousand customers from the previous year’s figures.26 While a 2010 agreement between Optus and FOXTEL has enabled Optus internet customers to subscribe to FOXTEL’s pay TV services, they are not able to access to FOXTEL On Demand programming via the internet.27 Sports channel ESPN3 is currently the only FOXTEL channel that can be streamed live via the internet. Table 5 presents an overview of FOXTEL’s OVC service offerings.
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