More than 300,000 Australian households have changed channels to subscription IPTV which could pose challenges for operators such as Foxtel, according to a new study by analyst firm, Telsyte.
The firm forecasts more than one third of all subscription TV services will be provided over broadband by 2015.
Telsyte director of research consulting, Chris Coughlan, said that the total subscription TV industry in Australia generates $2.7 billion for service providers.
“While most of this revenue goes to the two largest operators, Foxtel and Austar, there are emerging credible services over broadband such as Telstra’s Tbox and FetchTV that are supplementing the mature satellite and cable markets,” he said in a statement.
Coughlan added that broadband services were popular with consumers as they combine flexible viewing options with the ability to stream a selection of channels and access to large libraries of pay-per-view content, including new release movies.
“We expect FetchTV will increase its subscriber volumes through its internet service provider [ISP] partners, especially with the addition in October last year of Optus as a reseller,” he said.
Vodafone customers in Armidale, NSW, also have access to FetchTV following a National Broadband Network (NBN) trial which began in December 2011.
“Foxtel faces a dilemma as distribution over the NBN requires it to become a retail service provider supplying broadband access, something that its majority shareholder, Telstra, might be reticent to allow.”
Coughlan also said that Foxtel could face margin erosion if it follows suit with cut-down offerings.
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