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Telecom's internet television venture, Lightbox, was launched in beta (testing) mode yesterday, offering a raft of high-profile on-demand shows for $15 a month.
Due to have 5000 hours of fully operational content by the month's end, Lightbox gives "all you can eat" access to its content on up to five devices and named hit shows Arrested Development, Outlander and Mad Men among its "exclusive" offerings.
The service is tipped to challenge existing pay-television service Sky TV and provide an alternative for Kiwis who access overseas services such as Netflix and Hulu through backdoor routes.
Lightbox's managing director Kym Niblock said the service's pricing set it apart from Sky, while its content and design distinguished it from online alternatives.
"You don't pay any installation, all you need to do is download it on to your tablet. The pricing structure is really different, it's $15 for all you can eat. I am not sure how much $15 gets you on Sky.
"People can know that this is safe and it's legal and has things that aren't on Netflix."
It also promised to deliver exclusive local content - though details were yet to be announced - and movies, she said.
Sky TV, which starts at close to $50 a month for its most basic package, plus installation costs, yesterday announced it had renewed its exclusive content deal with HBO, which allows it to screen shows such as Game of Thrones and Girls on its premium SoHo channel.
Select HBO titles would be available on a new internet on-demand subscription service which Sky plans to launch this year.
A spokeswoman said its product and content differed from Lightbox's, and did not think customers were left wanting.
"We don't think Sky customers will substitute Sky for a SVOD [subscription video on demand] service, it's a very different product."
Sky was offering a range of special, cut-price deals for new subscribers - and planned to reward existing customers later in the year.
"Sky customers will be offered a huge selection of on-demand content through their internet connected MySky later this year ... at no extra cost. They won't need an SVOD service as well."
Tech commentator Ben Gracewood said Lightbox was likely to deter people from sourcing overseas internet television products through backdoor methods.
Sky's sport offerings would remain an undeniable drawcard, he said.
Internet service provider Slingshot allows its New Zealand customers to subscribe to Amazon Prime, Hulu, Netflix US and BBC iPlayer, which cost about $10 a month.
Internet NZ work programme director Andrew Cushen said Lightbox introduced consumers to a new way of using the internet.
"It looks like a very different service. "
While Lightbox remained tight-lipped about its plans for local content, NZ On Air believed the service was not funding anything new.
"Lightbox is not commissioning new local content to our knowledge. If they were, we would welcome them as new investment sources," NZ On Air chief executive Jane Wrightson said.
TVNZ said while it was focused on its free-to-view service, it was also "keeping an open mind" about paid-content in the future.
"We have an established offering that pulls in more than 5 million views per month. It's the market leader and its free of charge," a spokeswoman said.
TV3 owner MediaWorks said the Lightbox service would not impact on its television broadcast rights.
More people watched its shows on television than online, a spokeswoman said.
"When it comes to television, on-air viewing dwarfs online viewing."
The company's video-on-demand service, 3NOW, was free and continued "to go from strength to strength", she said.