Telstra TV is game-changer streaming services need in Australia

THE networks were put on notice last week, because a revolution is coming, and it will change the way we watch TV.

AUSTRALIA’S broadcast networks have officially been put on notice.

Back in the good old days — before this newfangled interwebs thing — Sunday night TV was king. You could always count on the free-to-air networks to wow us with the latest blockbuster movie TV premiere. In return, the networks were, more or less, rewarded with huge ratings, keeping both the TV executives and their advertising clients pretty chuffed.

Fast forward a couple of decades and there’s nary a movie in sight, having been relegated to the dead zone of Saturday nights and even then it’s usually repeats of Harry Potter and Bridget Jones’ Diary.

A ratings win in TV land today is anything over a million metro viewers. Not long ago, programmers could schedule just about anything and the viewers would come. Monday night episodes of Friends or Border Security could be relied on to pull in around 2 million viewers on any given week. This week, Seven and Nine’s big, new reality offerings, Restaurant Revolution and The Hotplate respectively, were ranging between 416,000 to 784,000 across three nights. Not exactly the stuff ratings dreams are made of. Not yet, anyway.

TV audiences have fractured, with their attention divided between multiple channels as well as, more importantly, online pursuits. Those online activities could be Facebook or just general browsing but more recently, the threat is streaming.

US streaming giant Netflix launched in Australia in March to much fanfare with its catalogue of lauded original programming including House of Cards, with Orange is the New Black, Daredevil and Unbreakable Kimmy Schmidt following soon after. Netflix was preceded in the local market by Aussie efforts Presto (co-owned by Foxtel, which in turn is half-owned by News Corp, the publisher of this website) and Stan, a joint venture between Nine and Fairfax.

Within two months of launch, Roy Morgan data found that by May, Netflix had signed up over a million Australian customers. Presto and Stan had cajoled 97,000 and 91,000 customers onto its platforms. That’s one in 23 Australians in a couple of months.

Unbreakable Kimmy Schmidt was picked-up by Netflix after its US broadcaster, NBC, elected not to put it to air.

NEW KID ON THE BLOCK

With myriad choices on offer in Australia, not to mention the tech-set’s ways to circumvent geoblocks to gain access to even more streaming platforms from overseas, anecdotally, many consumers are finding the whole endeavour slightly confusing.

This is where Telstra’s latest announcement could prove to be a gamechanger.

Earlier this week, the telco (which also owns the other half of Foxtel) said that it would partner with US streaming device maker Roku to launch a platform called Telstra TV.

The Telstra-branded Roku 2 device will house all streaming apps — including Netflix, Stan and Presto, as well as catch-up TV services like ABC’s iView, in one place. There are also rumours of a Foxtel Play app appearing in the future.

For the first time in Australia, all major streaming services will be available on the same TV platform, eliminating the need to keep track of different streaming subscriptions and apps. It will work similar to Apple TV but with the potential to bundle and get a discount on payment.

The Roku player’s search feature, unlike Apple TV or Google’s Chromecast, allows you to search between all your streaming apps for a particular title in one step, saving users from having to navigate through each individual service to look for they want.

Technology commentator Trevor Long said that while Australians have really embraced streaming services, there are still a lot of people who don’t have easy access.

He told news.com.au: “The demand of streaming services in Australia has been very strong and people have signed up in droves, however there is still a large part of the population who might not have the latest TV or tablet to allow them to watch things like Stan or Netflix and Presto. A simple device like Telstra TV is an enabler. Non tech-savvy people will be able to get the box and have immediate access.”

Moody dramas like Bloodline are best viewed without the interruption of ads.

Mr Long argued that the addition of streaming services on our TV sets gives viewers greater choice when choosing their prime time viewing, putting pressure on free-to-air networks and creating greater competition.

But because Telstra TV will, at least at launch, only be available to Telstra home broadband customers, the device may be more about being a direct competitor to Fetch TV (which has deals with Optus and iiNet) than the all-encompassing streaming device to change the landscape completely.

COMPETITION, WHAT COMPETITION?

TV networks have always maintained that they’re not in direct competition with streaming platforms. Rather, the two are complementary. Which is why Foxtel and Seven (co-owners of Presto) and Nine have all invested in the technology.

Foxtel group director of corporate affairs Bruce Meagher told news.com.au that the company believes Telstra TV will be a convenient way for consumers to access a range of services, including Presto. He also said Foxtel is keen to explore the opportunity for the platform to deliver a service such as Foxtel Play or an app or version of Foxtel tailored specifically for Telstra TV.

He added: “Consumers have different interests and needs so there is scope for many different types of services. Foxtel believes that there is plenty of opportunity for growth in subscription TV services including for our premium cable and satellite product as well as for lower-cost, less-content rich offerings.”

In the US, TV networks are already under the pump from the likes of Netflix who are luring audiences with their commissioned shows such as Bojack Horseman and Bloodline. Streaming services have also curried a lot of favour from viewers by giving a new home to shows that were fan favourites and critical darlings but cancelled due to low ratings. US streaming service Hulu recently picked up two new seasons of The Mindy Project after it was axed by Fox, following similar moves by Yahoo with Community and Netflix with Arrested Development.

The most expensive and most recent phoenix-like revival of these is the program featuring former Top Gear hosts Jeremy Clarkson, James May and Richard Hammond, which Amazon Prime commissioned for a reported $250 million over three seasons. There’s speculation that show will make its way to Australia through Stan.

Clarkson, Hammond and May are no longer the BBC’s most valuable property. Pic: Amazon.

NOT OUT FOR THE COUNT

But the proliferation and increasing popularity of streaming services doesn’t spell the end of traditional TV, yet.

Megan Brownlow, PwC executive director and editor of its Australian Entertainment and Media Outlook, told news.com.au that while streaming services will have an impact on broadcast TV as another competitor for a consumer’s time, they’re not direct competition to TV’s business model.

“There’s only one place to go for aggregated eyeballs. Streaming services are consumer-supported [in terms of where the revenue comes from], not ad-supported so they’re not competing with them for dollars. The competition for ad dollars [for TV networks] is coming from online video — YouTube, Facebook and online publishers.

“What subscription video on-demand (SVOD) services do is provide another level of choice. The key for free-to-air TV is that they still have large audiences — even if it’s not as big as it used to be — that are great for launching products [for advertisers] and providing integrated product placements.”

Viewers only need to watch a program like The Block to see how much advertising can be integrated into the program.

Broadcast TV, both free and pay, are still king when it comes to tentpole reality TV formats and sport which draw the biggest TV audiences.

2.13 million capital city viewers tuned in for the MasterChef finale.

Broadcast TV rights bring in big money for various sporting codes and it’s unlikely a consumer-paid product will replace that lucrative revenue stream any time soon. While sports organisations have started to experiment with streaming offerings (Cricket Australia and Tennis Australia), Ms Brownlow said the Aussie consumer market isn’t big enough to replace the money TV networks pay sporting codes for the broadcast rights. Australia just isn’t as big a market as somewhere like the US where Major League Baseball has launched its own streaming platform.

In addition, arguably, Australia’s broadband infrastructure isn’t yet strong enough to support millions of high-quality simultaneous streams of, for example, the AFL Grand Final.

On the reality TV front, Ms Brownlow said that it may very well be that audiences have started to watch different TV genres on different platforms. With free-to-air very much focused on reality formats and live sports in the primetime slots, scripted TV has become more synonymous with paid-for platforms or with catch-up TV — the most timeshifted programs (shows viewers record and watch later) are dramas, and people tend to skip through the ads anyway.

“Scripted TV is always hit and miss for TV networks and they’re expensive to produce,” Ms Brownlow said. “They should focus on the genres that are easiest to monetise.”

Recent data shows drama programs on streaming services get a ‘spike’ in viewing about 9pm — after the reality shows are over.

The networks are, at least outwardly, not sweating any streaming threat yet.

A Seven spokesman told news.com.au: “The number of viewing options in the market has increased. But let’s just stop for a moment and acknowledge the power of free-to-air TV as the most dominant viewing option. Right now, free-to-air reaches 85 per cent of Australians each week (OzTam).

“There is a lot of discussion about SVOD, but little in the way of independent analysis.

“In that space, we are delighted to be a partner with Foxtel in Presto and we are focusing on our offering in that market.”

Whether you think broadcast TV will continue to happily co-exist with new technologies or be relegated to the past like the Sunday night blockbuster movie, one thing’s for sure, for TV lovers, there are a lot of choices out there.

What do you think? Can traditional TV survive new technology platforms like streaming? Or will you switch off and turn to the internet for your viewing pleasure? Leave your comments below or tweet @wenleima or @harrytuckerr

The AFL Grand Final between Sydney and Hawthorn was 2014’s most watched program. 2.81 million metro viewers tuned in.