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IPTV 'Massive Growth', Bundles War 2013

By Oonagh Reidy | Monday | 11/03/2013

As Samsung announced its Yahoo IPTV deal and Foxtel Boots up its Internet TV service, the Internet telly wars have officially kicked off.

And there's no better time as DVD stores seems to be fading away from relevance to the web savvy Aussies. 

Scott Lorsen, the CEO of IPTV providers FetchTV, says the "new wave of Internet based services such as FetchTV, Apple TV and Telstra T-Box are true substitutes for the video store."

And he predicts 2013 is going to be a massive year of growth for online TV, and "far more aggressive bundling strategies from telcos" as Telstra looks to increase its penetration of T-Box and Foxtel, while Optus and iiNet bundle FetchTV with its Internet/phone services.

Conversion rates (to FetchTV) are around 100%, meaning once users convert to online rentals there is little or no going back to old ways of consuming content, says Fetch's CEO.

"If you'd asked me a year ago, I would have said the demise of the video store was overstated, but now we've reached tipping point," he told SmartHouse.

People are now talking about these new IPTV service more and penetration accelerates, especially around the holidays and BBQ seasons as people are exposed to new TV services in homes.

Although not releasing exact subscriber numbers, Foxtel said growth was "subdued" last month and has been busy releasing a slew of Internet TV services for Samsung TVs, iPhone and iPad, and also added the interactive social media app zeebox for viewers, which Channel Ten already has, and Nine and Seven also have pursued social TV apps.

"We continue to deliver to our customers and look forward to bringing many more devices and features online in 2013", the Pay TV giant's General Manager of Emerging Platforms, Kym Niblock said last week, and alluded to multi-screening  becoming "the new 'normal."

And speaking of free-to-airs, last week Yahoo7 announced PLUS7 catch-up TV service exclusively on Samsung devices where Seven shows can be watched 24 hours after live broadcast.

Foxtel is also planning to launch an enhanced version of Foxtel TV Guide, as it seeks to increase the services for subscribers to multi screens.

Foxtel was not available for comment at the time of writing.

Like Foxtel, Lorsen, would not not reveal exact subscriber numbers for the Oz-based FetchTV, but told SmartHouse growth is "very healthy - averaging 3.4-4 movie rentals from its on-demand service per week, identical to video store rentals.

Although Optus, iiNet andAdam are the only telco's currently offering Fetch service, provider expansion could soon be forthcoming, Lorsen hinted.

"Our stated desire is to include all non-Telstra players and we have had discussions with all of them," he said.

He also predicts the bundling of TV, Internet and phone services to become more commonplace, as "people prefer one bill."

"The battleground has shifted from a broadband led offer to a IPTV led one. Bundling also means cutting cost of the service compared to having 3-4 separate providers," he says.

Bundling is more efficient and lower prices compared to 3 or 4 separate providers.

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