COMMENT: When you compare Foxtel to the likes of Sky TV in the UK or the many pay TV services in the US or Canada, consumers are being right royally screwed by an organisation that is failing to deliver the most basic of services.Foxtel is owned by Telstra, News Ltd and PBL, three of the biggest media and telecommunication companies in Australia. Despite this, consumers are putting up with inferior set-top boxes, no proper EPG service and, in a lot of cases, no free-to-air TV stations.
For example, I live two minutes from the Sydney Harbour Bridge and six minutes from the Sydney CBD, but I am unable to access the Foxtel cable service for broadband from Bigpond or the Foxtel service.
The company, which has a monopoly on paid TV services, has only just started to make a profit, despite years of being the only player in the market. Technology (or the lack of it) is still a big issue for Foxtel. If you’re a current subscriber, forget about the luxury of a HDMI output from your Foxtel receiver, it doesn’t have one – even though just about every set-top box and all new large display TVs coming onto the market have an HDMI input. And if you are thinking of transferring content from your Foxtel IQ box via the USB port, forget it. Foxtel has disabled it for no other reason than it wants to control what is done with content.
A recent Smarthouse survey revealed that up to 80 percent of subscribers to the service watch free-to-air TV via their Foxtel set-top box, even though the program guide for the number one TV station in Australia, Channel 7, as well as Channel 10 is not available.
And the tens of thousands of Foxtel subscribers who get their service via a satellite feed have to put up with no access to either Channel 7 or 10. Yet the cost of the service is the same as that provided to cable customers who do get both stations.
What Foxtel is trying to do is retain a monopoly while delivering an inferior service for as long as possible. The company’s operators know that IPTV over fast bandwidth is only around the corner and they are concerned this will compete head-on with Foxtel services.
What Foxtel does admit is that they are agnostic and that in the future you will be able to access the Foxtel service via a web browser, with content being delivered to a PC as well as via a set-top box.
The issue for Foxtel going forward is content. If the big US studios or European TV content providers decide to bypass Foxtel or any of the free-to-air TV studios and allow consumers to buy their content from them directly for delivery to a PC or media centre, this will hurt as the content will be low-cost and commercial-free.
Programs like Desperate Housewives, 24 and CSI are already being sold to US consumers for viewing on a PC, both before the show goes to air and afterwards. For example, if a content aggregator comes along in the US market and offers to deliver a package of content that includes sport, access to first-run movies and documentaries for $10.00 a month, there are many in Australia who would buy the service. Delivery will be via a big, fat broadband pipe, similar to what Telstra was proposing to deliver.
The US aggregator would mirror the content to an Australian server farm so that the content could be delivered quickly, and in some cases at the same time as the content is available to US and European consumers. Not months or years after it has gone to air in the US or UK.
In recent days Foxtel has lost the rights to broadcast AFL, which will have an impact particularly in Melbourne, where Foxtel had their most loyal football viewers.
What Foxtel needs to do is get its act together, as very soon IPTV will be available and it will be in direct competition.
