Is Samsung A Threat To Telstra & Foxtel?

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As Samsung gets set to announce the availability of Foxtel on their new range of smart TVs, attendees to yesterday’s Astra conference said there is real concern that over time brands like Samsung, Sony, LG, Panasonic, along with Apple and Google will become the real threat to subscription and free to air TV providers.

Some observers believe that over time brands like Samsung Apple and LG will cut global content deals resulting in local Australian operations bypassing content suppliers like Telstra and Foxtel for the overseas content.

Austar CEO John Porter, who is currently waiting on approval to merge his subscription TV business with Foxtel, told SmartHouse there is real concern that brands like Samsung and Sony–who make display devices–will become the real threat to organisations like Foxtel and Austar.

“They are a potential threat, only recently Liberty (the US Company that owns Austar) discussed the issue of whether the big TV brands are a threat to the subscription TV industry. They have the customers and are now delivering content” he said.

Recently Samsung, who is already delivering the Telstra TV and BigPond movie service, launched a billing system in several Countries that allows them to generate revenue from applications and content available from Samsung devices such as their smartphones, tablets and smart TVs.

The roll out of a Samsung billing system is currently being undertaken in countries that include Germany, Austria, Denmark, Finland, Norway, Sweden, Ukraine, Vietnam, India, Thailand and Indonesia.

The Samsung billing system supports various billing options, including credit card, prepaid card and PayPal, in some countries the payment will be charged to a user’s phone account, thus eliminating the need to divulge sensitive credit card information.

In Australia Samsung is currently working with EMI to deliver a subscription music service.

Ben Kinealy, director of IPTV, T-Box, Pay TV and Video at Telstra, who is already providing a content service to LG, Samsung and Panasonic, said in the future brands like Samsung, LG and Panasonic could be a threat if they choose to go direct.

“You are opening up a subject that a lot of people have not thought about. We are looking to partner with the likes of Samsung and LG as we can provide their customers with a lot of connected home services such as connecting devices, broadband and security services” he said.

Mike Quigley the CEO of NBN Co who is currently building out the new fibre broadband network in Australia believes there is nothing stopping the likes of Samsung from getting a carrier licence and operating their own content and application network in Australia.

“We are only allowed to offer our wholesale broadband services to someone who has a carrier licence and these are relatively easy to get. In the future, companies like Samsung or LG could well obtain a carrier licence and operate on our network.

 

“When you have infrastructure like ours you will see some new business models flushed out. I have no doubt about that, if Samsung or any business gets a carrier licence we will sell to them. There is going to be quite an evolution and in some cases game changers, content is just one of them” Quigley said.


He claimed that in the future the NBN will capable off delivering a gigabyte per second into homes. “We have already announced pricing for this and these speeds open up some real opportunities for operators” he said.

A senior Foxtel executive who did not want to be named said “There has been a lot of debate internally about the threat that companies like Apple and Google and Samsung and LG will be to Foxtel over time. Consumers need a display screen to watch any content service so they have an advantage especially as they are selling multiple display screens such as smartphones, tablets and TVs.”

They added “This is really a good guy bad guy situation. Right now they need content and we need access to their customer base but in the future when they have built up their smart TV installed base there is nothing stopping brands like Sony, Samsung or LG from cutting global content deals and delivering content direct into Australian homes”.

“Because of the size of the Australian market they will still need a broadband partner which is where it gets tricky. This is where Telstra and Foxtel have an offering which is superior to what a Samsung or a Netflix can offer in Australia”.

Next week Samsung will launch a new range of Smart TVs that come with dual and quad core processors. They will be available with a plasma, OLED and LCD display. All of the devices allow consumers to access the device from a Samsung Smartphone or tablet.

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