Telstra TV is set for release this month (October), offering consumers access to Australia’s three leading subscription video-on-demand (SVOD) services in the form of Netflix, Presto and Stan, and bringing with it expectations of further growth in a market that in 2015 has already experienced a breakout year.
It’s likely that Telstra TV will play a significant role in accelerating the introduction of SVOD to a new wave of households beyond the early adaptors, and there are a number of reasons as to why, but it may first help to provide some context by taking a closer look at what SVOD is and the growth of the market.
The rise and rise of SVOD
For the uninitiated, SVOD – which is generally offered as a monthly subscription service – sees users provided access to a library of movie and television content, which they can view at their discretion, streamed via an internet connection and accessible via a range of devices, from smartphones to tablets to televisions.
Widely looked upon as the next evolution of video entertainment, SVOD as such represents a next-gen battleground for media players looking to stake their claim to market share, with competition having ramped up another notch this year.
While SVOD has been around for a few years now, it’s in 2015 that it’s really made its mark at a local level, so much so that the future of free-to-air television, a long-held staple of the Australian entertainment diet, is being questioned. The media landscape is evolving at pace, and Australians unquestionably have a massive appetite for SVOD.
While local offerings Stan, a Nine Entertainment Co. and Fairfax Media joint venture, and Presto Entertainment, a Foxtel and Seven West Media joint venture, launched earlier in the year, it was the arrival of US streaming giant Netflix shortly after that has proven the catalyst for bringing SVOD to the masses.
Take these Roy Morgan Research statistics from earlier in September: following its March launch, Netflix is now in 855,000 Australian homes (9.3 per cent), representing over 2.2 million people 14+ who have access to the service. The arrival of Netflix has by most any measure created some serious SVOD momentum.
However, as evidenced by Roy Morgan’s most recent monthly update, Netflix’s growth rate, while still steep, has begun to slow (likely in part attributable to free trial offers expiring), with Roy Morgan noting that it was the younger, earlier adapting households that drove initial growth.
And yet, the SVOD market is still in its relative infancy and there remains vast potential for further growth, especially amid the rollout of the National Broadband Network (NBN) which, delivering higher-speed internet to more Australian homes and businesses, will provide greater capacity to cater for the demands of streaming video. Enter Telstra TV.
What is Telstra TV?
Announced at the end of July, Telstra has partnered with US media device manufacturer Roku as it prepares to bring Telstra TV, which is built on top of Roku’s Roku 2 streaming media player, to market.
Roku is a market-leader in the US, and as such the co-branded Telstra TV represents a pretty solid bet for Telstra from a hardware perspective. The Roku 2, which retails in the US for US$69.99, comes with an infrared remote, features wireless and Ethernet connectivity, and is equipped with HDMI 1.4 and USB 2.0 ports and a microSD card slot. It features 720p and 1080p video outputs and Dolby Digital 7.1 audio. There is no in-built TV tuner, but as Telstra notes, this is in line with other comparative devices, such as Apple’s Apple TV.
From the content side of things, alongside Netflix, Presto and Stan, Telstra plans to offer a selection of TV catch-up services and new release movies from online movie rental store BigPond Movies.
Of course, there is also potential for future expansion of content into other areas, such as sports content, which is an increasingly lucrative market in the new media and once which Telstra already has a significant presence. As far as this goes, however, a lot will depend on how the market consolidates in the coming years.
Telstra has yet to reveal the finer details of the service, and for the time being it’s a case of watch this space, with the telco stating that details of other apps, including YouTube and apps included in Roku devices overseas, will be available closer to launch.
What other options are there?
Telstra brings significant clout to the battle for the living room, with the telco’s well-established reach and extensive infrastructure more than capable of steering the SVOD market towards new demographics. However, there are also some notable alternatives for consumers to choose from, and Telstra, while possessing many competitive advantages, will not by any means have things all its own way.
Time will tell how much and how quickly Telstra TV will change the landscape. It seems many consumers are still uncertain about the world of internet streaming, with Canstar Blue research showing that the majority of Australians are still not prepared to pay for TV content.
From the hardware side of things, amid a range of media streamers currently available, Telstra will be coming up against a couple of global tech heavyweights in the form of Apple and Google, with their respective Apple TV and Google Chromecast offerings.
Chromecast, which allows users to cast content from their tablet, smartphone or laptop to compatible televisions, carries a budget price tag and presents a convenient plug and play option, while Apple has recently unveiled an updated version of Apple TV, which it states is coming soon, complete with a Siri remote that allows users to search by voice.
There is certainly no shortage of hardware offerings, and, from this perspective, for consumers it is a matter of finding the option that best suits their requirements and budget.
A point of interest will be the sort of home broadband bundles Telstra will offer packaged with Telstra TV, with streaming a data-intensive exercise and consumers increasingly keen on data-heavy plans, allowing for worry-free data use. Telstra has already stated that BigPond Movies and Presto will be unmetered for Telstra fixed broadband customers, with standard data charges to apply to other apps.
It’s also notable that Telstra TV will, at least at launch, only be available for Telstra home broadband customers, and Telstra in this respect will be competing against other internet service providers, with consumers, who should also take into account the subscription costs of the various SVOD services, well advised to shop around for the plan that is best suited for them.
While the combination of Telstra TV and a home broadband plan bundle may seem like a convenient option, depending on the consumer’s data requirements and content consumption habits, other options may be more suitable.
For instance, iiNet currently offers unmetered Netflix on a range of plans, while Optus includes Fetch TV, which provides a variety of entertainment options, with a number of its plans that also come with unlimited data.
It’s all about timing
Telstra is getting into the market at the right time, and Telstra TV, from the details released thus far, has enough going for it to potentially make it a standout option in an increasingly crowded marketplace.
Telstra TV is probably not a game-changer, but it will likely more than do its part to accelerate the adoption of SVOD. As for how successful it is, this will depend in large part on how Telstra sweetens the deal with broadband and content incentives.
Convenience will likely be a key selling point for the Telstra TV, with the consolidation of the three major SVOD providers into the one unit, packaged with broadband plans, likely to hold broad appeal for consumers.