New Zealanders could be lured to ultrafast broadband

Thursday 9th February 2012

New Zealand consumers would take up ultrafast broadband (UFB) to tap into video content such as blockbuster movies and top-rating television programmes, according to a study commissioned by the antitrust regulator.

The Roy Morgan survey found the first few years of the government-subsidised high-speed internet network will attract households looking for premium video content. Some 50 percent of respondents said they would be interested in high definition movies and video delivered over the broadband network. Such content is currently the major form of traffic on existing internet protocol (IP) networks.

The Commerce Commission commissioned the survey as part of a demand-side review of barriers to UFB uptake for end-users. The regulator is hosting a conference in Auckland later this month to discuss the nation’s broadband opportunities.

Content providers have so far “expressed limited interest in using high speed broadband networks to deliver their existing content to consumers, as current transmission technologies are adequate and cost effective for the delivery of current video content services,” the report said.

Sky Network Television is a dominant player in content ownership, holding major sporting rights, film and TV rights, and negotiating resell agreements with all of New Zealand’s major internet service providers except Orcon.

The pay-TV operator failed in its bid to have content excluded from the commission’s review, which it had argued could become a quasi-regulatory inquiry if content arrangements were found to be a barrier to uptake.

Introducing a broadband infrastructure creates opportunities for change within the video content chain, which has traditionally filtered through from cinematic release to free-to-air television through a series of steps.

“This technology may enable new players to enter the market. It may also enable current market participants to deliver new products,” the report said. “The extent of these changes will depend on companies’ ability to access premium video content.”

New Zealand’s Over The Top propositions, where video is delivered over third-party broadband networks, “significantly” lags the rest of the world, and any future offerings will be reliant on companies securing access to premium content.

The Roy Morgan survey found most consumers weren’t willing to pay more than an extra $10 a month for broadband services, though retail service providers said they expected customers will pay more when those new services become apparent.

Roy Morgan also surveyed small and medium sized enterprises, and found 40 percent of respondents expressed some interest in applications available on the faster network.

Cloud-computing, where data is stored on remote servers and accessed through the internet, was flagged as an attractive area for SMEs that could reduce costs on back-office administration functions.

(BusinessDesk)

BusinessDesk.co.nz

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