[mythtvnz] Telecom backs Freeview?

[Nick & Ann Read]

TV next Telecom battle - from The Independent (www.theindependent.co.nz)
BERNARD HICKEY
TELECOM is to piggyback on the advent of Freeview digital television to laun=
ch
its own hybrid set-top box that it hopes will become the single gateway
householders use to watch, record, download and play television and movies.

The decision by New Zealand's biggest listed company to throw its marketing
and financial weight behind Freeview while it's still in its infancy will
provide a major boost for the platform, which free to air broadcasters such =
as
TVNZ and TV3 hope will provide real competition for Sky TV.

Telecom's decision to go down the hybrid television route rather than via a
pure internet protocol television (IPTV) path also signals its reluctance to
invest too heavily in widespread, high-bandwith broadband connections given
the uncertainty over government regulation.

Telecom's general manager of video services, Philip King, said the economics
of pure IPTV did not stack up given the uncertainty of the regulatory
environment and the likely revenues from IPTV alone.

Telecom had looked at IPTV in previous years and had decided again this year
that it could not be done profitably given the hundreds of millions of dolla=
rs
needed to upgrade and extend the underlying broadband network.

Telecom was now in early discussions with Freeview and both the free-to-air
broadcasters about how to launch its hybrid boxes. It is also investigating
what tools it can add to the boxes to help viewers download =E2=80=9Ccatch-u=
p=E2=80=9D TV or
movies using the connection the boxes will have to a home's copper wire
broadband connection, King said.

=E2=80=9CWe can be quite helpful to them (the broadcasters behind Freeview) =
in giving
Freeview the momentum to get going,=E2=80=9D King told The Independent Finan=
cial
Review.

He described the negotiations as =E2=80=9Ccomplex but friendly.=E2=80=9D

Telecom would use its marketing muscle through its extensive network of shop=
s
and its installation resources to help roll out Freeview. Telecom is the
country's biggest advertiser.

Until now, a small Freeview organisation has had to plan to take on the migh=
t
of Sky's resources on its own, including the task of deciding on set top box=
es
and planning installation systems.

A Telecom set top box would include a personal video recorder (PVR) and the
ability to download regular programmes or movies via the broadband phone lin=
e
connection.

These could be paid for through subscriptions or pay per view, with a revenu=
e
share potentially going to the programme provider.

Telecom is pitching the box as a useful set of tools on top of a regular
digital television receiver that helps Freeview compete with the likes of
SkyTV's MySky.

The hybrid boxes could even be subsidised, helping to extend the penetration
of the boxes. The simple TV next Telecom battle Freeview boxes being propose=
d
by TVNZ and TV3 were expected to cost several hundred dollars to buy and
install. =E2=80=9CIt's (subsidising boxes) with in the realms of possibility=
. It's
possible for high-value customers that you would want to encourage them on t=
o
that service,=E2=80=9D King said.

Sky also offers subsidised set top boxes and installation to encourage viewe=
rs
to sign up for its services. It now has more than 667,000 households, or mor=
e
than 42% of the market, signed up for its services.

King said Telecom had no plans to get into the business of buying and
producing content such as sports or entertainment programming, but would not
rule it out long term.

Asked if Telecom would bid against Sky for rights to broadcast All Black and
Super 14 matches when they come up for renewal in 2010, King said Telecom
preferred to focus on delivering the added extras through the box rather tha=
n
generating the pure content.

=E2=80=9CWe're not ourselves in the content game. We're looking to work in p=
artnership
with the industry.=E2=80=9D

This included the option of offering a different hybrid box that allowed
householders to receive satellite channels from Sky and to download movies a=
nd
programmes via broadband.

Telecom began work on its television plan in April and now has a team of 10
building the proposal.

King said he was recruiting another half a dozen people to lead the launch b=
y
the whole company in the first half of 2008. Telecom would tender for the
software and hardware used in the boxes in the first quarter of next year.

Telecom's move into television comes as it hunts for new revenue opportuniti=
es
to compensate for pressure on revenues and margins as the government re-
regulates the sector.