The NBN is critical for Pay TV to survive, as current web speeds are not up to scratch.
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And Australia’s broadband speeds are currently slower than developing nation Brazil, a top NBCUniversal exec has warned.
Speaking at the Astra Pay TV conference in Sydney yesterday, Kevin MacLellan , President International TV for NBCUniversal (behind channels like NBC News, CNBC, E!, Bravo) warned Australia will be left behind if it doesn’t adopt the controversial $36bn high speed broadband network.
“NBN is a good thing for Pay TV as a whole” he declared.
Fast broadband helps “upstarts” like Facebook, YouTube and Google happen and facilitates consumers who want to download movies and other content quickly.
“If the NBN is going to be as fast as it says then interesting times ahead,” he added.
However, slow broadband speeds are holding Australia back, with the international boss at NBCUniversal noting web speeds were faster in Rio, where he was recently on a business trip, than Sydney.
This is nothing to be laughed at considering Brazils ‘developing’ country status compared to Australia’s as ‘first world’ nation.
“Bandwidth is changing the landscape delivering education, information and communication tools,” he added.
MacLellan also reckons the proposed Austar/Foxtel merger, which the competition watchdog is due to make its final decision on next week, will also be a good thing for subscription viewers as it will drive competition.
He described the deal as a “monumental moment” in Oz TV industry.
“There is still opportunity for pay TV penetration growth” MacLellan believes, despite the fact both Foxtel and Austar numbers have dwindled in recent quarters.
Regional player Austar, which Foxtel is about to acquire, lost 8,845 viewers in the past year, while over at the biggest pay TV operator, flat growth of just 2.1% was announced in February.
The NBCUniversal boss also made comparisons with the Aussie and US TV markets and spoke of his previous employer Comcast, who was ten years ago No.5 cable provider in the US and “struggling.”
“Some people [at the time] thought cable was dead,” he added.
However in the 11 years since then Comcast is now the largest media company in the world with $61 billion revenue (and market cap of $80bn).
Comcast achieved this through the acquisition of broadband provider NBCUniversal, and was then able to offer “treble play” with subscription TV, broadband and phone services.
Comcast is now the largest Pay TV, broadband and also a major phone supplier in the US, which is no mean feat.
Regional Pay TV operator Austar’s 755,374 subscribers plus Foxtel’s 1.58 million, means a newly formed Pay TV operator will have just under 2.5m subscribers here.
And with 50% of Foxtel owned by Telstra this is precisely what the ACCC is fearing will happen in an Austar owned Foxtel world – that the media behemoth will have a monopoly on broadband services in some regional areas of Australia.
Read: Why ACCC Fears Foxtel
“It remains a tough environment in which to win new customers” Richard Freudenstein, Foxtel CEO said last month although appeared optimistic for enormous growth potential if the $2.5bn deal to buy Austar comes to pass.
And with rivals from Internet TV (IPTV) providers like FetchTV, Telstra, Apple TV, as well as content from TV makers like Panasonic and Samsung and free-to-air, Foxtel will have its work cut out.
But clearly Freudenstein and his troops are hoping Comcast’s story in the States will be repeated at Foxtel HQ.
But the ACCC must approve the deal first.
A decision by the competition watchdog will be handed down March 27.