Telstra bans Netflix, Stan from new streaming box: report

Metaratings
30 Jan 2015
00:00
Article

ITEM: Telstra is reportedly replacing its “T-Box” set-top box with a cheaper box that customers can use to access streaming Internet video services – as long as they aren’t Netflix or Stan.

Telstra has been planning to drop the T-Box – which functions as an IPTV set-top box and PVR – since last year, but has been mum about its replacement. According to the Australian Financial Review, citing unnamed sources, Telstra is going with a low-cost box with no internal hard drive, and will mainly be used for on-demand streaming.

In addition to free-to-air channels and BigPond Movies, the new box will also provide access to Presto, the new streaming video service launched earlier this month by Foxtel and Seven West Media.

However, the AFR reports, as part of the agreement with Foxtel, the new T-Box will be banned from carrying rival streaming services like Netflix, which is about to make it Australian debut. That ban also presumably includes Stan, another upcoming rival streaming service from StreamCo, a JV between Fairfax Media and Nine Entertainment Co.

While the Netflix/Stan ban hasn’t been confirmed on the record by Telstra, it wouldn’t be all that surprising – Telstra has a long-running relationship with Foxtel, and that will reportedly continue, as Telstra will upsell customers to Foxtel’s full content package via its new IQ3 box, due out next month. It’s doubtful that Foxtel wants anyone competing with it on the same box.

That said, it’s unclear how receptive customers will be to a box that limits what web-based streaming services they can use, especially a recognizable international brand like Netflix.

Meanwhile, Telsyte analyst Foad Fadaghi told the ABR that Telstra’s alleged plans might reflect the fact that there’s a bigger market in Australia for streaming Internet movies than for scaled-down Foxtel packages:

… Fadaghi said his company's research had found only about a third of consumers were prepared to pay for TV and movie content. There was also a strong overlap in consumers buying pay TV and online streaming services, he added.He said that while T-Box had been "moderately successful" it hadn't demonstrated that a sizeable market existed for cut-down Foxtel equivalents."Perhaps Telstra is recognising that the market for something that isn't Foxtel doesn't really exist. It's not a cut-down version of IQ that works in the market, it is actually something else altogether – web-delivered content such as Netflix …” … Fadaghi said his company's research had found only about a third of consumers were prepared to pay for TV and movie content. There was also a strong overlap in consumers buying pay TV and online streaming services, he added.He said that while T-Box had been "moderately successful" it hadn't demonstrated that a sizeable market existed for cut-down Foxtel equivalents."Perhaps Telstra is recognising that the market for something that isn't Foxtel doesn't really exist. It's not a cut-down version of IQ that works in the market, it is actually something else altogether – web-delivered content such as Netflix …” … Fadaghi said his company's research had found only about a third of consumers were prepared to pay for TV and movie content. There was also a strong overlap in consumers buying pay TV and online streaming services, he added.He said that while T-Box had been "moderately successful" it hadn't demonstrated that a sizeable market existed for cut-down Foxtel equivalents."Perhaps Telstra is recognising that the market for something that isn't Foxtel doesn't really exist. It's not a cut-down version of IQ that works in the market, it is actually something else altogether – web-delivered content such as Netflix …”

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