If Optus emerges from the TV Now legal saga victorious, the rules of content broadcasting will need to be rewritten to reflect the new technology landscape. Wenlei Ma talks to Austin Bryan about the potential paradigm shift.
When Optus unveiled its mobile recording service, TV Now, in July last year, it was received without excess fanfare. It was an interesting innovation but wasn’t labelled as a ‘landmark’ event, other than by the telco itself. How prescient Optus turned out to be.
Now embroiled in a high-profile and sometimes nasty legal battle, TV Now may very well prove to be the game-changer the industry doesn’t quite know how to deal with. In a shifting media landscape, the battleground for access to content has expanded beyond the traditional broadcasters.
Right in the thick of it is Austin Bryan, director of Optus Digital Media, tasked with delivering services and innovations to the telco’s millions of customers. With the role of telcos evolving far beyond two tin cans and a bit of string, Bryan believes there is a place for Optus in the new order of content distribution as a digital media broadcaster.
He wants to work with the TV networks and the content owners to bring about a pluralistic, choice-driven industry in line with changing consumer behaviour. “Your closed, walled garden approach, it doesn’t really work anymore,” he says. “You can’t put your head in the sand, you’ve got to partner. We all need to figure this out – it’s fast-paced, rapidly changing and ambiguous. It’s not just the technology – consumer behaviour is changing as quickly as the technology is.”
Bryan has been making his pitch to the networks and argues they need to think about the opportunities rather than just protect their old-world business models, which have been under threat from the rapid increase of all things digital.
“I think the answer is don’t be fearful of engaging. Open up and let’s talk about how we can all create content and deliver it in an exciting way that’s going to be really relevant so that we don’t just sit here and wait for global solutions that might not work for Australia,” he says. “We have good and open relationships with the networks, but I don’t think there’s enough dialogue around how they can step outside their broadcasting paradigms.”
Optus’ TV Now is an example of how the company is looking at the opportunities opened up by faster networks, sophisticated personal devices and consumer appetite. The service allows the nine million customers on its mobile network to record and play back content from any free-to-air network, similar to a DVR device.
Days after the launch of TV Now, word spread that the Australian Football League (AFL) and chief rival Telstra, who had inked a reported $155 million deal for online broadcast rights, were mounting a legal challenge against Optus. They argued TV Now infringed their copyright and broadcast rights. Soon the National Rugby League (NRL) got in on the action, fearful the price tag for its online content in the upcoming negotiations for its broadcast rights had just plummeted.
The furore from its opponents was loud and at times vitriolic. AFL boss Andrew Demetriou branded Optus a “disgrace”. TV Now was a whole new beast which threatened the established content broadcasting model, and in turn the lucrative deals that came with it. Particularly in light of the green-lit merger between Foxtel and Austar, Bryan believes access to content will be the arena clash of the new era. “If you believe in free market forces and choices in competition, Australian consumers have to have access to the broadest possible range of options for content,” he says. “Any time you have a monopoly on any aspect of content, you reduce choice, reduce competition and heighten costs for consumers. That can’t be good for our economy.”
Optus’ argument, which has upheld by the Federal Court in the new year, is that TV Now is no different to DVR or PVR devices in that a user must initiate the recording. Bryan believes the decision is a win for consumers and for competition.
“Forget the hyperbole and look at the product. Our view is there was a need for people to be able to do this kind of thing,” he says. “We’ve got a network, we’ve got the ability to offer content to consumers in ways that don’t say, ‘Go to a designated place in your home at a designated time and stare at the wall.’ In reality, we can make it available when you want it, where you want it and how you want.”
Despite all the noise around sports content rights, the top three most recorded shows on TV Now in March were US programs The Big Bang Theory, The Simpsons and The Bold and the Beautiful. In addition to light entertainment series, children’s programming is also popular on the service. The rest of the industry is convinced TV Now-like services are the way forward. Vodafone and iiNet are carefully watching the legal drama unfold, with both companies signalling their intent to establish similar mobile recording frameworks.
An appeal from Telstra, the AFL and the NRL is currently before the High Court. Bryan expects a judgement will be handed down before the month is out and is confident Optus will prevail.
In these new, untested waters of digital content broadcasting, Bryan offers a warning: “Multi-device, location agnostic services are going to be the context all content broadcasters and owners are going to have to tackle if they are going to survive in the 21st century.”
Taking the fight to Foxtel
Making significant inroads into the 70% of Australians who don’t have pay TV is another area of opportunity Bryan sees as part of Optus’ future. Partnering with IPTV provider FetchTV last year, Optus launched MeTV to challenge Foxtel’s dominance in the space.
Five months after going to market, the take-up rate has exceeded internal targets and expectations, particularly with regard to its ethnic package subscriptions.
“While still in its infancy, we think IPTV is going to be the viable mainstream solution for the 70% that could never afford the premium product,” Bryan says. “Word-of-mouth has been driving more take-up than we expected – consumers who have it are talking about the product. I think you can look to see IPTV being a major threat to traditional, overpriced pay TV.”
This article first appeared in the 20 April 2012 edition of AdNews.
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