Senior Telstra executives, along with their PR minders, turned up today to provide moral support to Samsung at the launch of a new range of 3D- and Internet-enabled TVs which in future, will feature Telstra’s BigPond TV.
The event came days after Samsung’s arch rival, LG, also announced a deal to access BigPond content. However, what is puzzling is that Telstra appears to have little, if any, content for their new TV service.
Right now, Telstra is cuddling up to anyone with the potential to deliver either a broadband download or access to paid-for BigPond content, which in reality is pretty scrappy when you look at what is available from the likes of Foxtel and free-to-air TV networks.
Telstra appear to be struggling to deliver any compelling or new content, even for their new Telstra Tbox, which has still not been launched across Australia.
Telstra see themselves as an aggregator of content, who in the future will deliver content to notebooks and slates as well as smartphones and TVs. And while they have a broadband network now, as well as a fast wireless network, they are missing the crown jewel in the form of compelling content that consumers want to watch.
Tier one content in
Tier two content is movies and right now several major global brands are appealing to Hollywood in an effort to cut global content deals. Among them are Apple and Google who are currently rolling out Google TV.
The problem for Telstra is that Australia is seen by the major Hollywood studios as an extremely small market. It is also a market where the studios have existing relationships with both cinema chains and free-to-air TV stations. They also have close relationships with the likes of Blockbuster, who on a Saturday night will rent up to 100,000 movies.
Then there is Apple, who at any one time can dish out millions of music and video downloads. Both Apple and Google see themselves as global TV companies who in the future will deliver content, such as live sporting events, to most countries in the world. They will not only deliver the content and sell advertising, but also charge a fee for access to the content. In some cases the content will be free, especially if a major vendor like Samsung or Panasonic is sponsoring it.
For Telstra to be even remotely competitive they are going to have to guarantee Hollywood large sums of money under a minimum guarantee arrangement and even then other competitors such as Apple are likely to have access to the same content.
What is an advantage for Telstra in the short term is the cost of broadband connections, with the national carrier likely to use this as an inducement for consumers who buy their BigPond service wrapped around a movie rental. What they are tipped to be working on is a plan to lure Samsung and LG customers to a BigPond movie store in an effort to get them to buy a BigPond movie. If this customer uses another ISP, they will then be offered a cheaper movie rental if they sign up to Telstra BigPond.
Telstra is also going to have to compete with new players such as Fetch TV, which is currently working with competitive ISPs such as iiNet to deliver content similar to what is available via the BigPond Movie service.
Fetch TV, which is set to launch shortly in Australia, has already cut a deal with iiNet and is currently putting together a consortium of ISPs to access its content.
Whichever way the content battle goes, Telstra is going to find it tough going up against both local content providers and overseas giants such as Google and Apple.
