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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 connections.
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 there.''
He did not expect live sport to be part of ShowMeTV's ''early proposition''.
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 providers.''
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 said.
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 Zealanders.''
Technology commentator Peter Griffin said Telecom's internet TV venture ''could finally crack Sky TV's monopoly on premium content''.
''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.