Telecom has provided a teaser around its planned internet
television product ''Lightbox'', Forsyth Barr broker Andrew
The internet-delivered service would be priced at $15 a month
and the first month would be free.
The service would be available through any broadband
connection - not Telecom specifically - and could be
registered on a maximum of five devices. However, it was
limited to a maximum of two concurrent streams.
Several key series would be included, such as Vikings,
not previously shown in New Zealand, 24 and Mad
''It will launch with a total of 5000 hours of content, all
of which will be television series. We expect additional
content such as movies and limited sports will come within 12
months of the launch. Telecom's plans for premium sports
remain unknown,'' Mr Rooney said.
Telecom's planned product compared with about 5000 hours of
content on Quickflix NZ for $12.99 a month across on-demand
and pay-per-view movies and television series. Netflix US had
about 6400 movies and 1580 television series on its current
However, hours of content mattered far less than quality of
content and the market awaited further updates from Telecom
of its full content roster, he said.
Along with content, there was also the issue of delivery. The
service was available on the web and through Apple's iOS
operating system. There was no application directly on to
television, at this stage.
It would then require an additional cable or some form of
device such as AppleTV.
''Given the earliest and most technical adopters have likely
taken a service such as Netflix or Quickflix, ease of use is
Forsyth Barr expected Telecom would continue to enhance the
service over the coming year in terms of both content and
delivery. There would be pressure on Telecom to reduce its
$15 price, for it to take its xtra customers ''off the
meter'' for content, and eventually show its intentions for
premium sport, Mr Rooney said.
Telecom had started a turnaround programme aimed at
eventually delivering $200 million to $300 million in cash
flow savings per year, excluding benefits from any unbundled
broadband access price reductions.
''Our concern is the risk of continued average revenue per
user [ARPU] decline from fixed services and increasing
competition in the mobile market.''
Forsyth Barr had an unchanged forecast on Telecom earnings,
increased the price target by 5c a share to $2.40 and
maintained an underperform rating on the company, he said.