EXCLUSIVE: Samsung Australia is set to become a major partner in the IPTV market after cutting three major content deals – two with Telstra and Foxtel. A third major deal is set to be signed this week.
According to Foxtel sources, the deal will see Foxtel programmes as well as their IPTV content made available via Samsung IP enabled TVs.
Next week, Samsung is set to announce a third deal with an organisation that is able to provide movies on demand, documentaries and local drama programmes.
Mark Leathan, Marketing Manager of Consumer Electronics at Samsung Australia, has confirmed deals with both Telstra and Foxtel, but at this stage is refusing to name his third partner as the contracts have not been signed yet.
“We will shortly announce several major content deals. At this stage I am unable to outline all three partners as we still do not have signed contracts with some of our partners, however, I can confirm that we will be working with both Foxtel and Telstra” he said.
In the past, Samsung has partnered with Foxtel in an effort to build its TV base in Australia.
In July 2008, Samsung ran a joint program with Foxtel, with buyers of Series 5 and 6 LCD televisions given a Foxtel HD+ set top box, including full installation and three months subscription to the Foxtel HD+ service.
“This proved highly successful”, said Leathan.
Insiders at Foxtel have told ChannelNews that new software is being developed that will allow Samsung customers to access both Foxtel and Telstra BigPond content. The same sources have said that Foxtel rejected a deal with Sony Australia who earlier this year announced an IPTV deal with Yahoo7, which is owned by the Seven Network.
Industry observers claim that a deal with Samsung Australia’s #1 TV vendor could provide an “awareness’ boost for Foxtel content at a time when demand for Foxtel services is starting to soften.
During the past 18 months Foxtel has ramped up their investment in IP-enabled services and internet functionality with users of their services now able to program content directly from an iPhone or a PC. The deal with Samsung will allow them to expand these services to a much wider audience.
Foxtel, which is 50% owned by Telstra, has seen growth come under pressure as the free-to-air TV stations ramp up their Freeview offering in Australia. Samsung, who has not supported Freeview, is set to everything that Freeview offers via a new ICETV interface, along with additional content from their new IPTV partners.
CEO, Kim Williams, said, “We still have a lot of customer growth ahead of us but the outlook will be much more contained. This growth will come from other segments of the market,” Williams says.
Foxtel is expected to end its current financial year in June with an average revenue stream from its 1.2 million installed base of around $80 per consumer, per month.
According to analysts, the problem for Foxtel along with Telstra BigPond is that the really “juicy” content, which is sport and Hollywood movies is not going too made available to them.
Sport content is controlled by the Federal Government anti-siphoning regulations which are currently up for review. Currently major sporting events cannot be “siphoned” off to pay TV or IPTV services where people are forced to pay to see them. The current anti-siphoning list came into effect in 2006 and expires 31 December, 2010.
At a content forum at the 2010 CES Show in Las Vegas, several Hollywood studios told ChannelNews that the only way that subscription TV and IPTV operators in Australia would get access to first run movie content would be by the provision of “large” minimum guarantees.
Senior Foxtel management have said that the future for Foxtel is via relationships with the likes of Samsung who have an installed base of over 700,000 IP enabled TV’s in Australia.
During the past few months Foxtel has been developing a new online platform that will compete with offerings from the likes of TiVo, and new kid on the block FetchTV, an overseas back operation that is set to struggle in Australia due to the same content issues that Foxtel face.
In an interview with the Asia Media Journal recently, Williams said that it’s difficult to gauge the threat posed by potential rivals such as FetchTV before they enter the market.
“Consumer-oriented businesses such as Foxtel must see all consumer services as opportunities for us to deliver to parts of the market we have yet to tap, to compose products that are relevant and appropriately targeted at certain market segments, either by age or income or geography.”
Alluding to the Samsung deal, Williams has said that Foxtel subscribers will see some “remarkable” new services over the course of this year, including content delivered through broadband ports installed in the company’s latest PVR, to be activated later this year.
Foxtel’s future prosperity, however, will also hinge upon exclusive content rights that it can secure, increasingly online as well as for pay-TV. Williams estimates that around 30% of content on Foxtel today is non-exclusive, as channel providers strike deals with free-to-air platforms, a proportion he is keen to see go down.
In a recent discussion with ChannelNews, David Thodey, CEO of Telstra who is also a major shareholder in Foxtel, said that “minimum guarantee’s” being demanded by Hollywood studios was an issue. “At this stage we have to balance the return vs the amount of IP-enabled devices that there are out there to access the content”.