(Inside Digital TV via NewsEdge) Will Australian digital-TV operator Foxtel go high definition (HD) domestically late next year‾ Perhaps, but there are a number of factors at play.
"I think we will launch HD towards the end of 2007 or possibly early 2008. The timing is dependent on the Optus D2 satellite being launched. We are currently at maximum capacity on the Optus C1 satellite," says Patrick Delany, Foxtel executive director of content, product development and delivery.
"We'll have more cable capacity once analogue is turned off, but we still need more satellite capacity if we are to continue offering one uniform product to satellite and cable customers. Technology compression advances such as MPEG4 will deliver further opportunities," he adds.
Foxtel believes it can take advantage of the HD opportunity in a way free-to-air (FTA) broadcasters have so far failed to do in Australia.
"FTA networks in Australia have really squandered their opportunity in HD, so we believe there is a real opportunity to differentiate with HD," he says. "In terms of how many channels, Australia is a high-profile market, but it is a small market."
He says Foxtel is "looking at all the countries around the world where HD has been launched. We've committed to doing at least two channels, and we are perhaps looking to do more. Ideally, we would like our service to include branded channels, perhaps movies, sports and documentaries. I think people expect documentaries, but they don't necessarily watch them. We are also looking at a push video-on-demand (VoD)- style channel where we can push HD programs, whether they are subscription VoD (SVoD) or pay per view into our new set-top boxes (STBs)."
Foxtel has been hugely successful in digital during recent months. It now has more than 1.1 million digital customers, and has achieved 90% digital penetration. As such, analogue services soon will become a thing of the past.
"By March 2007, we will have completed our transition of analogue subscribers to digital, and all Foxtel subscribers will, therefore, be digital subscribers. We have certainly performed above expectation over the last 12 months," he says. "There are some areas where we have done significantly better than expected, and some where we have not done as well as we would have liked, but the net effect has led to a very good bottom line and a great platform for the future."
The mobile TV future
Foxtel is now also on the implementation stage of mobile TV.
"We think mobile TV has tremendous potential. The two things we see for growing our business are mobility and VoD.
There are clear indications from our consumers that these are the things that light up their imaginations," Delany says.
Foxtel recently signed a deal with Telstra, which would see Foxtel delivering a package of channels to Telstra mobile customers via Telstra's Next-G mobile network and its existing 3G network.
"Foxtel is about delivering compelling video entertainment through any digital medium, including cable, satellite, broadband and mobile networks. Next-G is an exciting extension for Foxtel and, over time, we intend to grow the offering substantially with the addition of more channels and on-demand elements," Delany says, adding that there has also been a DVB-H trial.
"We see 3G and DVB-H being great partners, as mobile TV delivered to a 3G phone has obvious limitations as the operator is conducting an individual session every time a consumer watches the channel. That means 3G networks can only handle a certain number of people watching, which in turn means that the more popular a service gets, the more issues there are. To overcome this issue, you need a broadcast technology, and we think DVB-H is a good fit," he says.
He adds that Foxtel sees DVB-H as being part of a "Foxtel-to-go"-style product where there is a tablet-style screen with a disk drive on which one can sync up against a Foxtel personal video recorder (PVR) while also receiving live TV channels through a DVB-H chip.
"Hidden" SVoD launches
Like most pay-TV operators, Foxtel is looking at new platforms and methods to maximize its revenues. Delany reveals details of a new on-demand service in the planning stages.
"Ten percent of our base has the Foxtel IQ, a 160GB PVR. During the design phase of the Foxtel IQ, we made the decision to partition the hard drive, allocating 100GB for the subscriber and 60GB to Foxtel. In December, we will launch SVoD using the hidden Foxtel part of the partition. This will involve pushing programs over a hidden broadcast channel into the hidden part of the drive. Content will appear in a new on-demand menu, and it will be freely available to subscribers who subscribe to the channel. We are also looking at downloads to PCs," he explains.
"We may introduce a scaled-down service with a view to developing our technical understanding in this space as well as an understanding of the types of products consumers want on a download-to-STB-type service. If we were to launch a full download-to-STB-type service, it would be in around 18 months' time after we introduce our next generation of PVR, a 250GB-300GB box. This box will have a number of tuners, making it possible to allocate two tuners to the consumer: a tuner for products using broadcast technology (e.g., HD) and possibly an IPTV tuner for downloads. MPEG4 compression technology will also be utilized," he adds.
Interactive services
Foxtel has also been one of the leaders in interactive services, with current offerings consisting of eight interactive mini-channels. The operator has also introduced interactive voting across most of its channels.
"This month, we will launch a third Fox Sports channel to follow our recently launched Fox Sports News channel that incorporates an interactive news overlay," Delany says. "To help our subscribers get the most out of their sports subscription, we introduced a mosaic-type application called "ËœSports Selector,' which sits at the beginning of our sports genre in the electronic program guide. By loading the application, the viewer sees a grid of our nine sports channels, enabling viewers to watch nine feeds at once," he explains.
Content issues are also on the agenda during the next 12 months. He says issues surrounding sports rights need to be resolved.
"The government is undertaking a digital review at the moment, and it announced it will be allowing limited multi-channeling by the terrestrial networks," he says. "We are adamant that this review should allow for appropriate loosening-up of what is called the "Ëœanti-siphoning' act, which restricts our acquisition of sports rights in favor of the FTA networks. We are obviously heavily lobbying at the moment to get support from the government to grow our services."
© 2006 Access Intelligence, LLC
© 2006 Dialog, a Thomson business. All rights reserved
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