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 have all now 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 video streaming 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 a substantial content offering and now also a range of IPTV models. Telstra has abandoned its proprietary T-Box and in April 2015 introduced a new set-top box. The other telcos have gathered around the FetchTV 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, Australia - Digital Media - Video Streaming - Trends, Developments and Statistics, that provides market statistics, information and analyses.
Netflix approaches one million subscribed homes; Nine Network secures streaming broadcast rights for the NRL; Telstra TV service nears launch; EzyFlix closes; Stan signs multi-year content deal with Warner Bros; Dendy offering Dendy Direct streaming service; Presto and Quickflix enter joint marketing agreement; Quickflix adopting a reseller SVoD business model; Quickflix raises $775,000 to improve steaming service capabilities; Apps, IPTV, VoD, video streaming, video-on-demand, video podcast, online video, DVD, Mobile TV, online streaming, user generated content, catch up TV, digital media players.
Companies mentioned in this report:
Telstra, Optus, Internode, TransACT, TPG, engin, FOXTEL, VOD, Quickflix, Netflix, ABC, Ninemsn, Yahoo!7TV, Hulu, iiNet, SBS, Seven Media, AARNet, Apple, BBC, FetchTV, Getflix, Google, Hoyts, Netbay, Tabcorp, Ten Network, YouTube, Fairfax, Nine Network, Stan