Cable television, FetchTV (Australia), Foxtel, IPTV, Kieran Cummings, NBN, News Limited, Pay television



By Kieran Cummings (@sortius)

February 27th, 2013

It seems a day doesn’t go by where articles are being posted to News Limited (Murdoch) websites with nothing but negative spin for the NBN. Most, if not all, are founded on poorly constructed arguments that ignore technology & the reality. They all seem to point to one solution: anything the Coalition are saying they’ll deploy.

While this does reek of patent bias amongst Murdoch’s Australian arm, I feel this goes a little deeper than just wanting a Coalition government, but a fear of becoming obsolete in the age of IPTV (Internet Protocol Television).

While FTTN (Fibre to the Node) can offer basic IPTV, it cannot offer multi-set full HD broadcasting as FTTH/P (Fibre to the Home/Premises) can. With this in mind, it doesn’t take long before it’s apparent the likes of Comcast & Time-Warner in the US, are bleeding subscribers or seeing a slowdown in subscriber uptake due to internet streaming services such as Netflix or Amazon’s Prime service.

While we haven’t seen a drop in subscribers here in Australia, there has been a slowdown in subscriber uptake that is sending a message direct to News Limited/Fox: kill off any advancements in broadband speeds before it kills off your business model.

WHAT MAKES FTTN BETTER FOR PAY TV PROVIDERS

One thing to remember is that the main differences between FTTN & FTTH are, speed, service area, & reliability, with FTTN failing on all three. These differences can mean someone can happily use an IPTV service, or you are relegated to stuttering pixelated video. The one (& only so far) pure IPTV example I can give in Australia is FetchTV, with others like Quickflix not quite making their mark due to limited outdated content.

FTTN, which a large portion of Australia already relies upon, can be of many flavours, but the generally accepted limit is VDSL2+ up to 1km, VDSL2 up to 2km, & ADSL2(+)/ADSL1 after that. Looking at these numbers, even if VDSL2+ is used, a large portion of Australia will not be able to stream more than one channel to one TV comfortably in HD. Some will not be able to receive HD video at all, having to opt for 1.5Mbps “lite” services offered by IPTV providers.

With this in mind, we can see that opting for slower, less reliable, with a smaller service area for higher speeds, broadband benefits satellite & cable TV (pay TV) providers by limiting customers’ ability to utilise lower cost IPTV services. Don’t get me wrong, Foxtel are dabbling with IPTV with massively crippled plans that are far more expensive in dollars-per-channel than their set-top-box contract locked services.

Essentially FTTN offers a moderate speed boost to allow for slightly faster speeds, but not so fast as to make pay TV obsolete. This benefits pay TV providers, but not customers or content producers, leaving a monopoly in place to reap the rewards of archaic infrastructure that’s way past its used by date.

STUDIOS ARE GAME

It’s clear that content producers aren’t fazed by IPTV service providers, with Netflix in the US signing up many studios/channels to their service, & FetchTV offering a number of non-Fox channels for a fraction of the cost of Foxtel on Xbox/Smart TV (Foxtels pure IPTV service).

So where does that leave the likes of Foxtel in such an open market? Well, on the pointy end of a large stick. Murdoch & his ilk aren’t prepared for digital TV distribution, much like they weren’t prepared for digital news distribution & digital music distribution. Instead of being agile enough to deal with new technologies, pay TV providers have gone for the “entrench the customer” model that has not only failed for other mediums in the past, but turned customers away from their offerings.

With so many content producers embracing smaller start ups (or as the pay TV providers see them, up starts), what leverage do the big names in pay TV have left? The answer is simple: little to none. With pay TV you are limited to watching what providers broadcast & a small amount of on-demand content accessible via your internet connection. With IPTV services, multicast is offered for a small amount of content, but a majority of the content is on-demand, allowing customers to pick & choose what they watch. This has a two fold benefit for content producers: being paid for what is watched, not what is broadcast, & being able to accurately measure what customers watch the most.

WHY ARE PAY TV PROVIDERS SO AFRAID OF IPTV

The biggest fear for pay TV is advertising dollars being sent elsewhere as online services offer more affordable advertising rates than pay TV or free-to-air TV can offer. Instead of forking out thousands of dollars on a contract designed to benefit media conglomerates, advertisers can produce & deliver an ad, while getting immediate feedback on its effectiveness. They can even tailor an advertising to suit a user.

You’re interested in sport & cars? You will see mainly sport & car ads. You’re a geek/gamer like me? Tech devices & game ads will fill my screen. This is something that pay TV can’t do, even with an internet connection. They have invested millions setting up control rooms designed around the multicast (one source, many users) ideology, rather than unicast systems like Netflix which require little more than a web interface & a decent server farm to deliver content to millions of users.

FINAL WORDS FOR A DYING BEAST

The fear of obsolescence is palpable with both major & minor studios signing deals with IPTV providers, & IPTV providers expanding into markets traditionally dominated by cable & satellite providers. The only option left for a beast that’s dying is to lash out at younger, more agile companies making use of technology. The only way they can do this is by tainting the journalistic integrity of the newspapers & news broadcasts they own, removing all doubt that the likes of News Limited are existing on borrowed time.

In my experience, companies closest to death are noisiest, & boy are these old boys of the media landscape getting noisy about the biggest infrastructure project Australia has ever seen. Their newspaper revenue is down, subscribers are being turned off lock-in contracts, & their attempts to subvert social media (remember Myspace?) all point toward desperate people with nothing else left but to sabotage attempts to benefit citizens by feeding them fear, uncertainty, & doubt.

From laughable articles stating wireless is better than fibre (how do you transmit the data from the wireless towers guys?) to smear campaigns designed to bring those knowledgeable on technology into disrepute, this campaign against fibre optics will not stop until these media organisations die out like the dinosaurs they are.

Read more:

Coalition’s NBN plan to stop consumers taking control of media by Kieran Cummings (@sortius)

Tony Abbott’s scripted lies about #NBN costs by @zackster

Jack McCaw’s NBN story by @JacketMcCaw

Why Jake’s impatient for the NBN