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Digital, Legal & Anywhere Digital, Legal & Anywhere Innovation in Australian TV Table of Contents 1 Introduction 2 2 Report Conclusions 3 3 First, Some Definitions 5 4 Australia Today 7 5 The Shape of OTT in Australia 14 1 Introduction 2 INNOVATION IN AUSTRALIAN TV The way Australians watch TV is Alongside this report we are launching changing www.finddigitaltv.com.au, a pilot “one-stop” online resource showcasing legitimate TV services available Consumers are taking advantage of faster internet to consumers in Australia. It follows on from a and mobile connections and the proliferation of similar online resource launched in Singapore last connected devices to watch content in multiple year, which attracted very positive attention at press, locations and across multiple platforms and devices. industry and consumer levels. It also builds on work done by organisations in Australia such as the MPAA In turn, consumer interest is driving innovation at and IP Awareness. An enhanced service of this type industry level. The TV industry, technology platforms could be useful to Australian consumers and industry and content providers are responding to this growing alike to keep track of the range of content offerings demand by making available an increasing range of available. services. This study uncovered a broad range of “New Media TV Offerings” in Australia, ranging from catch- The intention is that this report and www. up services from the free-to-air broadcasters like finddigitaltv.com.au will together drive awareness ABC iview and subscription-based services like Foxtel about innovation in the Australian TV industry and Play to web-delivered aggregator OTT services like generate discussion about the changing face of TV in Quickflix (a “home-grown Netflix”, as it were). Australia and the challenges for legitimate services in competing against continuing piracy. But despite the ever-increasing range and variety of legitimate TV services available, many Australian consumers are still accessing pirate content. Piracy levels in Australia are high by any international standard. The reasons for this are varied and About this report: This report and FindDigitalTV. approaches for tackling piracy have been widely- com.au have been prepared by Olswang and discussed. However, one key finding of this report CASBAA. is that there is some scope to increase consumer awareness of legitimate services, both of the Olswang is a leading international law firm specific offerings available and the way in which specialising in media and technology. CASBAA is those offerings can be accessed. In other words: the authoritative voice for multi-channel TV in the consumers would benefit from a service that helps region. More information about the authors can them to find the legitimate content that is out there. be found on the last page of this report. Drawing on a combination of publicly-available data (from Government and other sources) and discussions with academics, industry bodies and senior executives across the media and technology industries in Australia, Digital, Legal & Anywhere looks at the changing face of TV in Australia and the drivers for change at consumer level. It considers the challenges and opportunities that exist for the TV industry and the way in which it is reacting. DIGITAL, LEGAL & ANYWHERE 3 2 Report Conclusions 4 INNOVATION IN AUSTRALIAN TV Australians love TV. The population of tech-savvy, New services are launching all the time. In early-adopters is voting with its clicks, taps and preparing this report we came across new services swipes – it wants to watch TV across as many devices launching almost by the week. These ranged from and platforms as possible. new catch-up offerings such as Nine’s “Jump In” and Ten’s “TenPLAY” through to new offerings from Demand is high and, as this report shows, industry international channels businesses such as Cartoon is responding by offering, arguably, the broadest Network Watch & Play and even niche offerings such range of content offerings available in any market as Surfing Australia’s mySURF.tv. in Asia-Pacific. Almost every commercial model on offer internationally is available to users in Australia, There is a huge variety in economic models. from “all-you-can-eat” streaming packages through to People often think of OTT in Australia as being increasingly innovative catch-up offerings from all of dominated by more expensive offerings tied to pay the major free-to-air broadcasters. TV subscriptions. There are indeed many such high- quality premium offerings. However, we also found a Put simply, there has never been more demand for wide variety of alternative payment models used as online video content delivered “over-the-top” (or well as various excellent free services. “OTT”) and industry is doing more than ever before to cater to the growing demand. Now is a good time to build on the work that has been done. This report uncovered a diverse range of These were the key findings of Digital legitimate content offerings in the Australian market. Legal & Anywhere: It also uncovered the opportunity to make users better aware of what content is out there. The market is ripe for OTT. The population is young, tech-savvy and affluent. The technology The piracy problem is not going away. Piracy infrastructure is improving rapidly and Australia is remains a huge problem. Despite all of the work that a world-beater when it comes to mobile broadband has been done to make available legitimate content, penetration. TV remains the most popular form of levels of video piracy in Australia are high by any entertainment consumption. All of these factors add international standard. Although the Government up to some great opportunities for the TV industry. is taking some initial steps to address the problem, there has been less decisive action in Australia A diverse range of offerings is available. This than has been seen in comparable markets such report found that at least five different types of OTT as the UK. In order for the TV industry to be able to offering are available in Australia, covering the full develop and invest in further legitimate offerings spectrum of commercial models seen in markets for consumers, participants in this report were internationally. unanimous in their call for the Government to take decisive action to address the problem. DIGITAL, LEGAL & ANYWHERE 5 3 First, Some Definitions 6 INNOVATION IN AUSTRALIAN TV The fast pace of innovation in Australian TV is at risk 3. StaND-AloNE OFFERINGS of creating confusion in the kinds of terminology that OTT offerings provided direct to consumers (usually is used to describe the offerings available. by channels or content providers) independently of platform subscriptions. This is usually either on a The concept of “over-the-top” or “OTT” is now widely free and/or ad-funded basis (in the case of catch- understood as being the provision of content over the up services provided by the free-to-air channels, for open internet without the content provider managing example) or on a transactional or subscription basis. the “pipes” through which that content is provided (i.e. distinct from managed IPTV services such as Examples: ABC iview, BBC iPlayer, Setanta, Sports Fetch TV, where the pipes are managed by the content Plus Surfing Australia, Cartoon Network Watch & providers themselves). However, our analysis of TV Play, Adult Swim offerings in Australia and other countries found that there are at least five broad sub-categories of OTT 4. CONTINGENT OFFERINGS offerings, each of which works differently both in OTT offerings provided by channels or other content terms of business model and consumer experience. providers which are only available to subscribers of It is worth pausing for a moment to consider each that particular channel or channel tier on the relevant of these in turn and to look at some examples in platform. Australian TV. Examples: ESPN3 and any of the offerings on Foxtel The Five Categories of OTT Go. 1. AGGREGator OFFERINGS 5. HARDWARE OFFERINGS OTT services where the majority of the content has These are best described as “dedicated device been sourced and aggregated from third parties. offerings” – content delivered over-the-top that can Typically these services are provided either on a pay- only be accessed on a specified device. Service per-view, monthly subscription or ad-funded basis. An providers control both the content and the hardware international example would be Netflix. on which that content can be viewed. Examples: YouTube, iTunes, Quickflix, Crackle, Examples: Apple TV, Google TV. Viewster 2. PlatforM OFFERINGS OTT offerings provided by TV platforms, for example through VOD and catch-up services, only available to subscribers of the platform in question or who specifically subscribe to that platform service as a distinct offering. Examples: Foxtel Play, Foxtel On Demand DIGITAL, LEGAL & ANYWHERE 7 4 Australia Today 8 INNOVATION IN AUSTRALIAN TV 4.1 Some Context AUSTRALIAN TV Australian TV is, for the most part, free-to-air OVERVIEW dominated, with a relatively low penetration of pay TV To understand the state of Australian TV today and (making up somewhere around 30% of households), the direction it is heading in, it is useful to briefly something that may, amongst other things, be consider the unique geographic, cultural, economic attributable to the relatively late start for pay TV in and political context in which it exists. 19958. As at the last census in 2011, Australia had a TV in Australia is regulated by the Australian population of 21.5 million1. It is a vast geographic Communications and Media Authority (ACMA). space, the sixth-largest country on earth by land area, There is assertive regulation of media, including equivalent in size to mainland USA and one-and- “anti-siphoning” restrictions on sports content (a a-half times the size of Europe2.
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