Warnings Telstra’s move into video streaming could create a low-cost rival to Foxtel


The Roku2 which Telstra is set to use to launch its service

Telstra’s decision to ditch its T-Box offering in favour of a new streaming device to rival Apple TV has led to warnings it could erode its part-owned pay-TV service Foxtel’s customer base.

This morning the telco announced it is partnering with tech company Roku to launch Telstra TV, a streaming service offering customers easier access to services like Netflix, Stan and Presto (which Telstra has a stake in through its 50 per cent ownership of Foxtel), and stop offering its popular T-Box product to new customers.

There have been suggestions the service may also support a weekly “sports pass” that would give consumers access to a selected sports channel, such as Fox Sports, leading media buyers to question what Telstra’s intentions are in the sports rights market.

“Telstra obviously are a key player in sports rights,” Chris Nolan, CEO of Starcom Mediavest told Mumbrella. “This could complement the sports right for Foxtel currently has, but there is also a risk should it compete by offering a more accessible lower price point access.”



In a statement this afternoon the telco told Mumbrella the new offering would not have “sports apps” but added: “Whether or not [sport] content eventually makes it there depends on what happens with rights negotiations.”

Telstra currently holds the digital rights to the AFL and NRL, with both codes currently seeking to renew their broadcast deals this year.

Nolan, whose clients include Telstra’s chief telco rival Optus, noted that the move was likely to be a further major shake up in the media landscape.

This morning Foxtel rival Fetch TV confirmed to Mumbrella it is also launching a similar device into the market at a lower price point.

Telstra is reported to be set to offer the device either as a stand alone, or as part of a bundled deal starting from $89 for 200 GB of data and free local calls. 

“This is all very interesting,” Nolan said. “The telcos are clearly choosing to become content providers as opposed to data providers. It further signals the broader proliferation of content providers which now includes all of the telco industry.”

Telstra was reluctant to be drawn on the potential risk to Foxtel, which counts its exclusive live sports services as one of its key drawcards.

Jo Pollard, Telstra group managing director of media and marketing, told Fairfax Media: “We will not be positioning this as a substitution for Foxtel at all. This is very much for non-pay TV customers.”

Foxtel today declined to comment on the move.

Telstra TV sees the telco partnering with US video streaming device company Roku, which produces streaming devices that compete with the like of Google Chromecast and Apple TV, to offer access to not only video streaming services, but also TV catch up services and new release movies from BigPond Movies.

“Australians have enthusiastically embraced video streaming as an entertainment platform and Telstra TV will differentiate Telstra as a provider of streaming content,” said Pollard.

“Rather than restrict our customers’ choices, we want to host all the popular streaming video services on our platforms and make it easy for them to get all the content they want in the one place.”

Telstra’s rivals are also understood to be watching the move closely and today FetchTV CEO Scott Lorson, who provides the IPTV offering for major telcos Optus, iiNet and Dodo told Mumbrella that they would have their own announcements in the coming months, while declining to be drawn on the specifics.

“We certainly have firm plans to expand our family of set top box devices and will be making announcements with our partners in due course,” said Lorson.  “As with all of our product initiatives, we will be looking to leverage developments in technology to leapfrog our competitor’s offerings.”

Telstra TV adds to Telstra’s existing range of entertainment products, which include T-Box and Foxtel from Telstra products. The streaming service will be available for purchase in September 2015, with pricing and more specifics around content and the streaming player to be announced closer to the launch.

Nic Christensen

Related content:

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