The obsession with Internet speed

Once the obsession with Internet speed wanes, many will realise that it was content – and access to it – that really mattered all along.

Content is something TelstraClear has been focused on from the start. As the country’s only triple-play (phone, Internet and TV) provider we know that having a robust high-quality network is only part of the story. It’s the content that matters.

Our cable-connected customers benefit from a consistent high-speed service. The traditional telco mind-set was that they chose a package with the speed and data cap they want and away they went.

In reality, whether on cable or copper, what customers think they’re paying for and what most telcos and ISPs think they’re selling are quite different. One’s buying content and the other’s selling access. The challenge for 2012 is to get telcos and customers to see things the same way and, as the old saying goes, the customer’s always right. The industry needs to move to providing a valued service that delivers – and in some cases creates – content. That’s a huge ask because getting content to the customer still requires access: costly wires and expensive electronics – and that cost has to be recovered.

The question becomes how to move from providing ‘just an Internet connection’ to offering ‘a home or business information and entertainment solution’. I think the answer lies in embracing that last word: solution. As we move into the ultra-fast broadband age most New Zealanders will have access to the sort of connection our cable-connected customers in Wellington, Christchurch and Kapiti are already used to.

More Kiwis will have access to reliable always-on Internet that allows them to game globally, watch and record multiple TV channels at once, operate a personal server to share and access their data from anywhere in the world, or run a web-based home business from any connected device. Each of those exciting worlds has appeal to many of us. As long as they work properly and well, and that’s where we must provide solutions and not just the access or ability.

Video content is a good example of where internet use is heading. Although New Zealanders’ are watching more user-generated video and premium online TV, we’re still near the bottom of the international league table – along with Australia. Two reasons account for this – lack of legal online content, and data caps – and both will need to be addressed if New Zealand is to make the most of UFB.

It was only a year or so ago that connected TV was still an emerging trend. It’s now here, albeit still a small segment. Online video is integrated into growing numbers of consumer devices. In many countries (but not here), Netflix is bundled with Apple TV. Almost all new TVs themselves are Internet-enabled. Overseas, the Internet is becoming a viable video source and is a threat to Pay TV providers.

It provides consumers (in other countries anyway) with choice; drives competition, and makes ‘democratic’ broadcasting easier. Just before Christmas we saw the demise of the Stratos TV channel. The cost of moving to digital transmission was cited as a key factor in the decision to cease broadcasting. We are heading to a world where TV and the Internet will be synonymous, whether wired or wireless. Without the need for expensive transmitters and repeaters, more money can be spent on content, both more and better content.

Content, along with interactivity, is also the key to the move to social TV. This integrates social networking with TV. Your mobile device acts as an all-in-one TV remote, EPG and chat. Viewers can provide instant ratings feedback, or even ‘like’ content and alert their friends and followers to it. The content creator, provider or broadcaster will be able to tailor any supporting advertising and marketing to your preferences.

The advantages are many. You will be able to self-select what you want to see and when you want to see it, rather than be forced to view what a TV programmer decides you should see.

This is game-changing stuff. Television as we know it will drastically change. For now, we are seeing studios and Pay TV operators opt for the status quo. These industries should be looking at how to provide what customers want in today’s internet world. They need to realise, as we telcos have, that content is king. They need to understand that choice in content, delivery and price packages is what customers want. Netflix has recently stated that it won’t come to New Zealand due, in part, to the restrictive content deals here.

And that is the nub of the problem our industry needs to grapple with. It’s something that my team at TelstraClear has been giving a lot of thought to: ensuring we can provide our customers with content that they value enough to buy, even if we don’t own the content they’re accessing.

I’m hoping that, in 2012, the content industry – TV, movies and music – will see the light and decide to work with telcos and provide customers with real choice at competitive prices. Together we can see in the coronation of content as king, all the while respecting legitimate copyright.

Allan Freeth
Chief Executive Officer
TelstraClear

ENDS

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