Foxtel launches IQ3 claiming launch is about market penetration and playing down Netflix threat

iQ3Pay-TV operator Foxtel has downplayed the threat to its customer base from streaming services such as Netflix, as the company today launches its much-delayed new set top box the IQ3.

The new box is effectively a streaming video recorder, allowing consumers to record more shows at once, and has one terabyte of recording space – enough to store 345 hours of standard definition recording. However its main draw is the ability for viewers to scroll back up to 24 hours in the electronic program guide and catch up on shows they have missed, streamed across the net.

“Our thinking is around is we want to have a much higher household penetration than we currently have,” Foxtel chief operating officer Rohan Lund told Mumbrella. “We want a higher customer advocacy and a better experience. That’s the logic behind this.”

The launch comes one day ahead of tomorrow’s Australian launch of US streaming giant Netflix.



However, senior executives from the subscription television service were reluctant to be drawn on the extent of the competitive threat posed from both Netflix and also Nine/Fairfax joint venture Stan to Foxtel and its average revenue per user, which is among the highest in the world.

“Competition will always be there and the best thing we can do is to make sure the Foxtel experience and value proposition is as good as it can be and we keep growing so we can keep investing in experience and value. The IQ3 is a key part of that plan,” said Lund.

Foxtel’s upgrading of its set box offering, with IQ3, has been delayed a number of times but Harris Hutkin, head of product customer experience argued the new technology would position the company well, competitively, for the future.

“The way I think about it is we wanted to make sure it was right and it was ready”, said Hutkin. “Getting feedback from customers has definitely influenced it and if we felt like something wasn’t right then we have adjusted it.

“The big thing we have had to deal with is blending live content, as well as VOD (video on demand) content as well as recording content and I can tell you personally that it is a much greater challenge to solve in terms of customer user interface as opposed to just a video on demand service.”

Among the enhanced features in IQ3 are the ability to restart or go back and watch current shows, record up to three programs at once while also watching a fourth program, on demand video services in both library and rental, with recording space with up to 172 hours of high definition content or up to 345 hours of standard definition recording. It also connects to the internet via wifi – allowing it to be placed away from internet ports in the home.

Foxtel’s VOD streaming service Presto will not be available on IQ3 but the company did signal that this may change over time as the offerings between Foxtel and Presto evolve.

“The Presto service will not be available at launch,” said Nick Dand, head of managed products at Foxtel. “There may be a time where the content diverges and it makes sense for the product to be but at the moment it won’t be there.”

The launch of IQ3 comes after Foxtel last year slashed its prices for new subscribers and reworked its offerings as it seeks to combat the entry of new cheap online streaming services to the market.

Telstra has also announced it is unmetering access to Presto for its customers, a move designed to encourage VOD use, while Foxtel has also unveiled its new ‘triple play’ pricing of TV, home phone and internet services, a play designed to widen its subscriber base.

“This is quite momentous for us the IQ3,” said Lund. “We have had a very very busy five months, we had the change to pricing and packaging in November. That was looking at the package we had and that entry price point.”

“Broadband was the next thing and that was launched in February. It is the ability to have unmetering of broadband for Foxtel customers and then the one that brings it all together is the IQ3.

“It is the first truly hybrid experience of a broadcast and IP delivery of content that will have both linear and nonlinear content together. From the customer’s point of view it makes it quite seamless.”

The Foxtel iQ3 is available starting today for $125 for the set top box plus $25 for a self-installation kit; or $75 for installation by a Foxtel technician.

Nic Christensen 

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