Illustration: Eric Lobbecke Source: The Australian
THE powerful television executive looked rather sheepish over lunch. The topic at issue was nothing less than the future of TV, and he had a tale to tell about his teenage daughter and the impact of the phenomenon known as IPTV.
Dad, keen to point his daughter to some worthwhile TV, had suggested Downton Abbey, Julian Fellowes’ grand servants and masters Edwardian drama that Seven screened last year to much acclaim and even higher ratings. The forthcoming season two, due on Seven soon, is eagerly anticipated. But when the executive followed up with his daughter, she was unexpectedly enthusiastic: “Dad, season one was great but season two is even better!”
That she was able to watch the program at all, before it hit Australian screens, was due to IPTV. It stands for internet protocol television, and means watching TV over the internet. Some say it is about to change everything. Certainly, there’s a bewildering array of brands to choose from, including Apple TV, FetchTV, Foxtel, GoogleTV, Quickflicks and ABC iView.
Then there is which method to chose to watch: via digital TV sets that come with IPTV built in, or by a separate set-top box or even via a website.
The problem is, these services are not really on people’s radars.
“It is very early in the take-up curve. I don’t think most people know what it means,” says Duane Varan, director of Audience Research Labs at Murdoch University. When most think about online TV, they think of “a three-minute clip of someone who puts a pie in someone’s face”, he says.
“I don’t think most people think it is the legal form of the programs you enjoy on TV, now available over the internet.”
But for young people, IPTV is not over the horizon, it is here. “They are doing it already and doing it in droves,” says David Castran, chief executive of research analyst Audience Development Australia. “The research indicates that for people 25 to 54 in Sydney and Melbourne, 30 per cent of their TV viewing is that, but it is DIY: do it yourself.”
And DIY, for the most part, still means illegally. While legal IPTV is a nascent industry, illegal piracy has taken off. And what they want, by and large, is US drama.
“Everyone I know has copies of Revenge. They have downloaded them from the internet via BitTorrent,” Castran says. The US melodrama, starring Madeleine Stowe as tragic social powerbroker Victoria Grayson, is an updated Count of Monte Cristo set in the glossy Hamptons.
Australian viewers love it, with its debut topping two million viewers in February. But recently, after a break over Easter, ratings had slipped to 1.22 million. Seven reacted after Anzac Day by doubling episode broadcasts to twice a week to catch up to the US.
“It realised the program is being pirated,” Castran says. For Castran, the advantages of IPTV are numerous. You can watch television quickly, ad free and as many episodes as you like.
IPTV will change what we watch. Partly in reaction to this, Australian networks this year will emphasise local content that can’t be downloaded beforehand, such as Nine’s super-talent quest, The Voice. It is bringing in more than 2.3 million viewers each night, the biggest hit in years. But to be part of the conversation about the show in cafes, parties and the office kitchenette, you have to have watched the latest instalment. The program is IPTV proof. “Strong Australian content is a lot safer from pirating,” Castran says.
It is astonishing to think that when masterful English playwright Dennis Potter (The Singing Detective) referred to television as the “palace of varieties in the corner of the room”, it was restricted to a few dozen linear channels that dictated what we watched, when we watched, rather then the endless online smorgasbord of today.
IPTV will change what it is to watch TV. In fact, it already has. At a recent industry conference, Microsoft executive David McLean outlined how viewers would be able to start watching a drama such as medieval sword and sex fantasy Game of Thrones at home via a device such as Microsoft’s XBox, before hopping on to a bus to work and continuing to watch the same episode via a mobile phone or tablet.
Certainly, our TV landscape has changed beyond recognition since the 1970s. Media executive Nick Leeder remembers those days well. He recalled recently: “As I was growing up in Newcastle in the 1970s, my access to information and entertainment was limited to a handful of media outlets – two television channels, one newspaper and a handful of radio stations. Given that airtime and column inches were scarce and expensive resources, it’s not surprising that I had so few choices.”
Leeder is now the managing director of Google Australia and New Zealand. It owns YouTube, which in terms of the number of hours Australians devote to it is a significant TV channel in its own right. Globally, four billion videos are viewed every day and 60 hours of video are uploaded every minute.
“My family has endless choices of what to watch, listen to, play and read,” Leeder says. He is fond of pointing out that Australia has a trade surplus in online video. More people overseas watch more hours of Australian-made video than Australians watch of overseas-made video.
“International online users consume eight times more Australian video content than Australians themselves, with the US being our biggest audience,” says Leeder, who himself is indicative of how the medium has changed.
Google is said to make more money than our big three TV networks combined, but the contrast of low-profile Leeder with a traditional media mogul such as Kerry Packer couldn’t be more marked.
The online medium has thrown up new stars, such as sassy online blogger Natalie Tran. The Sydneysider gained a massive following with her humorous take on life, so much so that when suicide prevention program R U OK? hired her and Hollywood star Hugh Jackman to film online endorsements, at one point just 50,000 people had watched Jackman, while Tran had attracted 1.4 million hits. Mainstream TV is ignoring her, but companies such as Lonely Planet have hired her to be a brand ambassador.
IPTV will change the way companies advertise. David McGrath, the ebullient salesman behind the development of a product called Viewer Interactive Application Program (VIAP) reveals how his technology allows consumers to shop while they watch.
On his laptop, McGrath screens a clip from Sex and the City. Miranda and Carrie stroll through a park while discussing their therapy. Suddenly they freeze and, as a cursor flits over their clothes, up pops a product description of each item. Want Miranda’s Minnetonka calf high moccasin boots? Simply click on them and for $225 VIAP will buy them, bag them and send them to you.
But will the potential of IPTV become a permanent revolution, or will it go the way of the video disc, Betamax video, CB radio and the First Republic? Just because the technology exists, that doesn’t mean fickle consumers will adopt it. While we love new technology, and have the highest penetration of smartphones in the world (50 per cent of the market has one), we haven’t fallen in love with pay-TV in quite the same way as other countries. Pay-TV penetration here is stuck at about 30 per cent, below levels in the US and Britain, due in part to the anti-siphoning rules that restrict the amount of live sport pay-TV can show.
At the Audience Research Labs at Murdoch University, Varan and his team undertake research that goes worldwide, issuing findings on everything from limited interruption addressable TV advertising to profiling the ad avoider. Varan thinks an IPTV future is inevitable but not a fait accompli, citing obstacles present here that are absent overseas.
First, most broadband internet in Australia is offered under a metered model and you need a lot of bandwidth to watch TV.
“That’s hindering the growth of that sector,” Varan says, because it means that IPTV is not a simple proposition. However, if iiNet is your broadband provider, you don’t pay extra to watch its IPTV service FetchTV. Same with Telstra’s T-Box and Foxtel’s IPTV service.
The second barrier is about access. “Is your show available and by whom?” Varan asks. Not all services can provide the same shows. It is different in the US with aggregators such as Hulu and Netflix, “a one-stop shop for a good portion of your content”. Those brands are not available here.
Third, do you connect via a smart TV that encloses the IPTV technology, or purchase a set-top box (Xbox or T-box), or rig up a computer media centre or something else altogether? Fourth, which of the myriad providers to choose?
And, finally, there is what happens when you power up and connect.
“The majority of the interfaces, particularly if you are trying to navigate through a TV, are absolutely god-awful,” says Varan. “The industry is at its nascent stage and it hasn’t developed its conventions. There are a lot of barriers.”
So, the forecast is that Australia will lag behind the rest of the world in IPTV. “It’s not one of the sectors where we will be bold pioneers,” Varan says.
Then there is the looming National Broadband Network, inexorably being rolled out amid political controversy. It will pipe superfast broadband into all homes for a price but, he warns: “It could be a non-event. You radically improve capacity but you could still have a metered model and all the same problems we have today.
“The real power of the IPTV universe is the on-demand characteristic,” he says.
“Conventional TV is like responsible drinking; you have to pace yourself. If you really like something in the IPTV universe you can binge.”
Thus Foxtel, which has an expensive subscription model threatened by cheaper and targeted IPTV, says it has a range of IPTV offerings on its own service but also as part of Telstra’s T-box and Microsoft’s XBox. The pay-TV company offers subscribers a Mad Men special: viewers can download 10 crucial episodes of the critically adored but low-rating US drama (Foxtel prefer to call it “niche”) to complement the current run of season five on Movie Extra.
What is striking about IPTV is its non-essential nature. It is not a must-buy. Certainly, IPTV is years off attaining the level of consumer consciousness where people are aware of it, people are talking about it and people are using it.
Castran warns the impact on TV could be total, and recalls an industry conference several years ago where a speaker warned television was about to go the way of Encyclopedia Britannica — destined for an online-only future.
But Varan is measured. “What is most amazing about the US story is that conventional TV viewing has gone up,” he says. Everyone feared it would cannibalise but, once again, TV has triumphed.
“Before, even if you liked a show, you were lucky to see all episodes a season. But if you miss an episode, you can now catch up,” he says. Viewers who come late to a show can use IPTV to buy all the episodes and watch at their leisure.
“The big companies are still benefiting. It’s a remarkable development.”
Stephen Brook is media editor of The Australian.
