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IPTV "Disrupting" Pay TV

By Oonagh Reidy | Monday | 17/06/2013

TV still rules the roost, but Internet services edging in

That's according to a new 'State of the Media' report from Deloitte, which shows that 2 out 3 Aussies list the TV as the most used source of entertainment - whether it's viewed on the TV set, tablets, laptops or smartphones. 

Australia is still the biggest TV watcher among all countries surveyed by Deloitte, including the UK and the US. 

Online viewing is also "becoming mainstream", with more than 50% of those surveyed saying they use free-to-air online catch-up services like ABC iView or Plus7. 

However, Aussies - especially those under 46 years  - do watch TV content increasingly on smartphone or tablets.

Multi-tasking, or watching TV while simultaneously surfing the web (19%), texting (15%) or reading emails (17%)  is also growing as is microblogging - tweeting about TV shows while watching. 

In fact, only one in three people surveyed solely watch TV, without fiddling on a secondary device also. 

Even though Deloitte anticipate Smart TV sales to rise, it appears we're not doing a whole pile with them - we're still using the good 'ol PC computer to watch Internet content. 

Aussies are less likely to use on-demand services on their Smart TV - the absence of 'must-see' exclusive content on Internet-connected Smart TVs is a barrier to uptake, the report warns. Those aged under 30 prefer to watch TV content via the web rather than watching via Smart TV.

So why are we buying them?

By default, Deloitte analysts told the report launch in Sydney last week. "Most won't be bought for their connectivity. It's not the [Internet] connected device in their minds." 

This won't change much in the future, it appears, with one in four expecting to use their Smart TV "more or the same" in the next 12 months.

3D TV also failed to take off as anticipated, with 4K TV (Ultra HD TV) the next big thing, Deloitte's latest media report indicates. 

However, analysts note the "challenge" Ultra HD TV poses for broadcasters to create 'exclusive and compelling' content that can be watched on the connected TVs. 

To pay or not to pay 

Pay TV rates in Oz remain low at around one in 3 homes or 34% penetration  - but up to 7% are thinking of cutting the cord due to the cost, warns Deloitte. 

About 4% are also thinking of cancelling their service altogether due to high subscription costs or the belief they can get the same stuff online for free. 

Meanwhile another 3% are considering changing their providers in the next 12 months, and there are now a slew of cheaper Internet TV options like FetchTV, or on-demand options like Quickflix. 

Aussie Pay TV is being "disrupted" by OTT Internet rivals, Deloitte report warns - including Internet channels offering their own 'exclusive' content - like NBA own dedicating channel rivalling Foxtel ESPN and a bundle of new pay as you go IPTV services.

Pay TV companies are now scrambling for survival in the IPTV age - launching 'deeper' experiences including apps, enhanced electronic program guides, internet and tablet services, the report notes.

This can clearly be seen in Foxtel moves to up the ante lately - launching TV services on iPhone, iPad via Foxtel Go app and no contract plans. 

Deloitte also notes the rise of DVRs, but Aussies are using them to skip over ads - which presents a headache for advertisers and broadcasters.

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