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May 27, 2010
Sony has rolled out the PSN online movie store for its PS3 games console in Australia. At launch there were 600 titles available, including some in HD, with all the major studios plus a handful of local independent distributors providing content. Price points start at $3.99 for digital rental and $7.99 for digital retail.
Meanwhile, Australian pay TV operator Foxtel has announced plans to offer select programming over-the-top (OTT) via the Xbox 360. The service - Foxtel by Xbox Live - will be available via internet-connected Xbox 360 games consoles in Australia by end 2010 and will enable users to access linear channels such as FOX Sports, Discovery, Nickelodeon, Disney and, MTV as well as a range of video-on-demand (VOD) content, including movies and TV series.
Foxtel has indicated that it is not necessary to be an existing Foxtel customer to subscribe the service, but users must have a broadband connection and live in an area capable of being serviced by Foxtel TV. Foxtel's pay TV services are available mainly in major metropolitan areas (with more rural areas serviced by rival provider Austar).
Accessing the service will also require the premium subscription tier of the console's online layer, Xbox Live Gold, in addition to purchasing the separate Foxtel by Xbox Live subscription. Details of the full channel line-up, packages and pricing, will not be announced until nearer the launch.
The announcement follows the launch of Foxtel Download in October 2009 (see below), an application-based service for the PC offering TV content on a catch-up basis as a free value-add for subscribers to the relevant TV channels, as well as movies on a transactional VOD basis.
The launch of the PSN movie service will help drive growth in the Australian online movies market, which is relatively underdeveloped compared with the US and major European markets. Until mid-November 2009 when the Zune video store for the Xbox 360 was launched, Apple's iTunes Store was the only major device-based service offering movies in Australia. There are a handful of standalone PC-based services from local providers, including Foxtel Download, but consumers have generally proven reluctant to pay for content tethered to the PC.
It is not yet clear to what extent the Foxtel by Xbox Live service will overlap with Foxtel Download. Were paid movies included, their availability via the Xbox would likely boost consumption as it provides a compelling hardware piece to the ecosystem. It is interesting to note that in the UK, where Microsoft agreed a similar deal to ?carry' BSkyB's OTT service Sky Player, the Xbox iteration excludes its transactional movies piece, Sky Box Office, perhaps to avoid competing with the console's native VOD service, Zune.
Indications are that Foxtel's OTT service mirrors the strategic principles of Sky Player, which are basically two-fold. Firstly, it will provide a value-add for existing customers as a multiroom-type service, with the console offering an alternative to a second set-top box (STB). Secondly, it will help Foxtel target consumers that are not currently subscribing to either its cable or satellite pay TV services, possibly in the form of a slightly smaller package of channels with a rolling monthly subscription, as in the case Sky Player.
It is an important move by Foxtel given the imminent launch of a hybrid DTT / OTT STB from incumbent telco Telstra (which is interesting in itself as Telstra has a 50 per cent share in Foxtel) and ISP iiNet planning a similar service in partnership with third-party platform provider FetchTV.
Uptake of these services will be largely contingent on whether they will be excluded from broadband users' monthly data allowance as broadband packages in Australia are usually capped, restricting consumption of data-heavy online video content. There is scope for all three - including Foxtel which was the second biggest ISP behind Telstra's BigPond at end 2009 according to Screen Digest data - to offer the services on an unmetered basis to their broadband customers.
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