Streaming video or IPTV has been under development since the early 00s, as higher speed broadband services slowly became available. At that stage it was seen by the telcos as an opportunity to compete with the cable TV operators who started to enter the broadband market at the same time. However, while the cable TV operators have been very successful in entering the broadband market internationally, the telcos have been rather spectacularly unsuccessful in entering the video entertainment market.
There are several reasons for that and these include: their reluctance to upgrade their infrastructure for the delivery of high-speed services; their vertically-integrated model, which made those services too expensive for consumers; and the stranglehold the broadcasters have on video entertainment content.
The industry muddled along for a decade, but changes started to happen when new players in the American market were able to break through those various obstacles. Netflix and Hulu were able to use the broadband technology and break into the content market and this created a degree of urgency among telcos and broadcasters alike to abandon their restrictive practices (costs and content). They all now have more or less adopted the Netflix pricing model of around $10 a month.
In the meantime catch-up TV has also become a major part of IPTV. The ABC was the early leader here but all commercial stations and the SBS now have their own on-demand' service.
Quickflix was the first IPTV player in the Australian market to offer movies; however it was perhaps too early and experienced major setbacks. The key player in this market remains Foxtel the traditional cable or pay TV operator with the best content offering and now also a range of IPTV models. Telstra has abandoned its proprietary T-Box and will introduce a new set-top box in 2015. The other telcos have gathered around the Fetch TV service. The traditional media and broadcasting companies have also formed their own alliances and entered the market.
In the longer term there will not be room for all of them. With each having a different set-top box fragmentation will hamper growth. As the video content market is an international one it will be interesting to see which of the local players will be able to survive in the longer term. It is all about content, and Netflix's international buying power will be difficult to beat.
There is a separate report that provides market statistics, information and analyses.
Key developments:Apps, IPTV, VoD, streaming video, video-on-demand, video podcast, online video, DVD, Mobile TV, online streaming.