Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Telecom faces big bill as it tip-toes into content with TV

Telecom faces big bill as it tip-toes into content with internet TV offering

By Paul McBeth

Feb. 21 (BusinessDesk) - Telecom Corp’s attempt to step out from its legacy business and embrace a new digital future isn’t expected to come cheap, according to a fund manager.

The Auckland-based company today announced plans to rebrand itself as Spark and launch a new internet-based television service as online media disrupts traditional models and creates new opportunities. Both are expected to happen in the middle of the year.

Chief executive Simon Moutter told a conference call today the company is budgeting for about $20 million of cash to be spent in the 2015 financial year, about three-quarters of which will get sucked up securing content. Telecom is in the process of negotiating content deals and building an over-the-top platform, where video is delivered over third-party broadband networks, to provide the new services.

“If you’re going to get customers, you’re going to have to have a big, deep, broad offering,” said James Lindsay, senior portfolio manager at Tyndall Investment Management. “You would expect the content purchases they will be making over the coming year or two to get an adequate service offering is going to be expensive.”

Telecom will make the TV offering available to all New Zealanders, rather than just its own subscribers, and expects to have about 5,000 hours of content across all genres when it launches.

That compares to the 60,000 films, television programmes, documentaries and sporting titles held by ASX-listed Quickflix, and is dwarfed by the one billion hours of content on California-based Netflix.

Last October, Moutter told a Commerce Commission-led competition conference in Wellington that retail network operators are facing increasing pressure on their revenue streams, and that any shift towards content would have to be valuable enough in its own right to cover the cost of investment.

Today, he told analysts Telecom aims to build value for shareholders with the TV service, which will not only attract users, but is also expected to drive fibre uptake and lift data usage.

A 2012 Commerce Commission study into demand-side issues for high-speed internet services found video services were likely to be the primary driver for consumers at first, and that uptake would accelerate if more options were available.

Moutter dashed speculation Telecom might bid for the local rugby broadcast rights, saying they were accompanied by production obligations that the company wouldn’t be capable of meeting any time soon.

Earlier this month Telecom ended a decade-long reseller arrangement it had with pay-TV operator Sky Network Television. That followed the company signing a distribution deal with web-based broadcaster Coliseum Sports Media to play the English Premier League football.

The shares fell 1.5 percent to $1.45 today.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Maritime: Navigation Safety Review Raises Big Issues For The Govt

Shipping Federation: "The reports makes it clear that the ratification of the Maritime Labour convention (MLC) is long overdue. Only when the MLC is ratified will Maritime NZ be able to inspect and enforce the labour conditions on international ships visiting our ports." More>>

ALSO:

100 Years After Einstein Prediction: Gravitational Waves Found

For the first time, scientists have observed ripples in the fabric of spacetime called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe. This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos. More>>

ALSO:

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news