Telecom has revealed its plan to provide movies and TV shows
to subscribers over the internet.
New Zealand's fourth-largest company yesterday announced its
move to become a TV provider, which will enable it to
capitalise on the introduction of ultra-fast broadband
throughout New Zealand.
Subscribers will be able to watch Telecom's ShowMeTV service
on personal computers and tablets through internet
Users who want to watch the shows on a TV set will have to
connect it to their computer, but Telecom hopes to eventually
beam the service directly to smart TVs and smartphones.
ShowMeTV will start within months, positioning Telecom -
which is changing its name to Spark - as a rival to Sky TV,
Television New Zealand and MediaWorks.
The plan is modelled on US-based Netflix, which has 44
million members in 40 countries.
Analysts say Telecom's chances of success in breaking into
the internet television market hinge on whether it can secure
high-quality programmes, such as HBO's Game of Thrones
and AMC's Breaking Bad, for which viewers will be
willing to pay.
Telecom said it would spend $20 million on the service in its
next financial year, which begins on July 1, and roughly $15
million of that would be spent on buying shows.
Chief executive Simon Moutter said: ''It's primarily
television content initially, and we'll expand it from
He did not expect live sport to be part of ShowMeTV's ''early
Netflix is not legitimately available in New Zealand, and a
service that is available, Quickflix, has been criticised for
a lack of quality content.
Mr Moutter would not reveal who Telecom was talking to about
supplying its programmes.
''We're ruling nothing out. We're open to all content
Sky TV chief executive John Fellet shrugged off Telecom's
plan, saying subscription video-on-demand services such as
Netflix complemented pay-TV businesses like Sky TV, rather
than taking customers away.
A TVNZ spokeswoman would not be drawn on the specifics of
possibly supplying its content to ShowMeTV.
''But as a general principle, we'd always be interested in
looking at opportunities that could bring us a benefit,'' she
Telecommunications Users Association chief executive Paul
Brislen said Telecom's plan was an ''ideal move''.
''Nobody is offering a serious content play - it's a little
bit here and a little bit there,'' he said.
''We've got Quickflix but they're a bit stuck because the big
boys [studios] don't want to play with them. So, hopefully,
Telecom can have a go at it and provide legal content for New
Technology commentator Peter Griffin said Telecom's internet
TV venture ''could finally crack Sky TV's monopoly on premium
''Getting its hands on the best content will be expensive,
but if anyone other than Sky can afford it, Telecom can.
''It will be stepping on Sky's toes - and those of the
free-to-air broadcasters - as it goes after HBO series and
the cream of the crop from the big American TV networks and
Hollywood movie studios.''
However, he did warn it was not altogether safe for Telecom.