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Leading Video on Demand player, Singapore-based Anytime on Demand is growing at a cracking pace everywhere in Asia Pacific except Australia.

Why? CEO Craig Zimbulis says the lack of a national high speed network is holding us back. But new developments such as the xBox 360 and Intel Viiv, could provide a way forward.

Without a National high-speed network to plug into, VoD will continue to struggle in Australia said Zimbulis who heads up the Anytime operation as CEO and President.

Zimbulis was most recently COO for Virgin (Asia Management where he oversaw the development of Virgin’s business in Asia Pacific, but has a ten year legacy with Walt Disney’s Consumer Products division where he held a number of management roles.

Zimbulis joined the Singapore-based digital content licensing operation in 2004 as COO before being recently promoted to CEO and President.

Anytime is unique in the world of digital entertainment being the only licensee permitted to distribute online content from major Hollywood studios such as Fox, Sony, Warner Bros and Universal. The company has the rights to IPTV-style distribution in 14 Asia Pacific Countries including Australia. Rather than operate directly, the company works with in-country partners, ISPs and Telco’s, which deliver its content to customers either via a set top box or PC under a revenue share agreement that sees the Studio’s take 60 per cent with Anytime and the Telco sharing the remainder.

While the company’s licence only permits the distribution of streaming video content, the company is currently in negotiations with its partners to allow the distribution of downloadable content rather than streaming, which would significantly improve its ability to deliver a service to countries without high-speed networks in place.

Zimbulis said the current MP4-based streaming technology the company uses requires a network capable of delivering a sustained download speed of 2MBps. This is 25 per cent above any connection offered by Telstra BigPond or its wholesale customers leaving the market for Anytime in Australia on the peripheral.

That’s not stopping the company doing business in Australia, however. Anytime has a well publicised service operating over the high-speed Transact network in the ACT and has recently signed a distribution agreement with start-up North Queensland telco RIA. Regional Internet Australia (RIA) is a Townsville-based ISP which plans to offer a triple play service to regional subscribers. RIA began delivering a wireless broadband service, but then added ADSL2+ earlier this year. It recently signed a wholesale deal with Uecomm which is working in a tie up with Ergon Energy’s telco division Nexium to deliver high-speed broadband services to regional Queensland.

 

 

 

The fibre to the node infrastructure will allow RIA to deliver Anytime on demand video as part of a broader set of services including data and voice via a set top box. Once the network gets rolling Northern Queensland users will be able to access the network in Townsville and Cairns, but this is only the beginning. Western Australia and South Australia are also on the road map.

Like other providers, RIA will take a fully branded solution from Anytime. It’s a one stop shop. Anytime takes the Hollywood content, re-encodes it to MP4, sets the bit rate to suite the network, censors the film according to local laws, add subtitles if required and provides a Barker channel to promote the service.

One of the company’s requirements with licensees is that Anytime gets set top box landing page positioning for the service. Consumers are billed by their ISP/Telco provider which remits the required revenue share back to Anytime.

To date only 130,000 users have access to the system across the Asia Pacific, but growth rates and three deals which will come on line in May this year will increase that to one million by the end of the year. Transact in Canberra has only 14,000 customers for the service.

The West Australian-born Zimbulis explains the regulatory environment and legacy infrastructure in each country directly affects the ability to deliver Video on Demand services and he remains frustrated that Australian’s aren’t able to access this type of service.

In most countries the regulatory environment works against Anytime, incumbent cable operators are slow to digitise because we they have geographic monopoly, while major telco’s find it a “big stretch” to move into the entertainment business.

Subsidising a set top box “is a mugs game” he says, so you have to put together an offering compelling enough for people to go out and buy yet another box to put in their lounge room. Anytime can only form part of this picture, but a triple or quad-play, which bundles voice, video, data, and if possible mobile phone is one way. The xBox 360 is another, but more on that later.

Zimbulis says that having dealt with the various telco’s in the region he’s found they are fundamentally flawed in their approach, while cable companies are in a position where their channel bundling subscription strategy is at stake if they introduce a la carte services like video on demand.

Zimbulis derides both Foxtel’s and BigPond’s entry into this area saying Foxtel’s is little more than a way to fill up bandwidth using the same content and the BigPond movie download service, which has very little compelling content and which he couldn’t even get working on his last visit to Australia.

But there is hope on the horizon. Zimbulis is currently in Australia to visit potential service providers. He says the company gets inquiries everyday from around the region. Not all are suitable partners, but with the price of delivering MP4 streams into home falling all the time, the more partners Anytime can sign up the more incremental revenue it can earn. Three years ago it cost $450 per stream to deliver MP4; this has now dropped to $100 with lower hardware prices and better compression technologies.

 

 

 

Government regulation, the infrastructure and the customer metrics all seem to point to second tier telco’s. “There are few tier two telco’s out there that are willing to take a punt,” says Zimbulis, providers that are building high-speed networks with the customer access and marketing nous to make it work.

There’s also another way into this business, using personal computer technology rather than set top boxes. Without a compelling triple play offering large ISPs (and Zimbulis notes there are really only a handful of those in Australia) can get into this business using Microsoft Media Centre and in particular Intel Viiv technology.

Anytime is very bullish about the opportunities presented by the release of xBox 360 which not only has Media Center capabilities built in, but is also operates on a wireless network. The fact that the console is a gaming machine is the killer application, but once it’s in the home, the device has the potential to remove the need for a set top box in Anytime deployments.

Similarly, the introduction of Viiv configured PCs will also enable the introduction of video on demand in Australian homes.

Either, or both, could pave the way for Australian VoD services not tied to a particular Telco or ISP. Using the public Internet rather than a walled garden approach to access streaming video would open any new player to a huge potential customer base whether they are an iiNet, Primus or RIA customer.

Add the possibility of download content, if Anytime is successful in gaining the Hollywood rights, would also reduce the dependence on high-speed network access and make VoD possible for a much larger segment of the broadband user base. Even BigPond customers would be able to download movies, and play them back once the download was complete.

While this may not provide the instant gratification of streaming on demand, a decent 1.5Mbps BigPond ADSL or cable connection would deliver an MP4 movie in 10 or 20 minutes while you make the popcorn.

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