Telstra TV streaming device launches

Telstra has launched its video-streaming device Telstra TV, allowing its customers to supplement its T-Box and subscription pay-TV service Foxtel services already on offer with access to streaming services Netflix, Presto, and Stan; as well as catch-up services SBS on Demand, Plus,7 and 9JumpIn.

According to Joe Pollard, Telstra chief marketing officer and group executive of Media, the device will provide more home entertainment choices off the back of the Telstra network.

"The powerful combination of our world-class networks and quality, differentiated content, and ease of use give our customers an entertainment experience that is truly world class," she said.

Telstra had announced in a blog post in July that it would be partnering with streaming platform and device manufacturer Roku to launch the Telstra TV service.

"We are very excited to unveil Telstra TV, which is powered by Roku, and give Australian consumers a simple and flexible way to stream their favourite content direct to their television," Andrew Ferrone, VP of Pay TV at Roku, said.

Allowing users to cast to a second screen, the device will bring Telstra into direct competition with the Google Chromecast and Apple TV.

Originally slated to launch in September, the device was delayed until October. It will cost AU$109, or free as part of the two highest-tier broadband bundles. Only usage of Presto and BigPond Movies will be unmetered, with the remaining services to count towards the customer's data allowance.

Customers signing up for Telstra TV before December 25 will also receive three-month subscriptions to Presto and Stan, as well as AU$15 to spend on BigPond Movies offerings.

Speaking at the CommsDay summit in Melbourne on Tuesday, Pollard, who was last week promoted from her role of group MD of Media and Marketing, outlined Telstra's plans to become a media company as well as a telco.

"The next wave of media ecosystem disruption is coming from telcos and media companies coming together," she said.

"They're beginning to integrate, be overtaken by each other, so what we are seeing is the need for world-class content with world-class distribution mechanisms -- ie, the power of a great network -- and scale to deliver the next wave of shareholder value. So what we're seeing around the world is telcos becoming media companies, and media companies becoming telcos."

Pollard argued that Telstra is in a unique position to offer media content services due to its high-speed, far-reaching network.

"One thing is absolutely clear: All of these services need to be delivered on a fast and reliable network," she said.

"We consider ourselves as more than a telco, and more than a media company. Our goal is to lead the industry by giving customers great content experiences, and we do this by an aggregation of content and providing the broadest content experience for all Australians.

"Our formula is very, very simple: It starts with the power of our networks -- we have a long and proud engineering history, and our networks are our powerhouse. So our approach is to combine world-class networks with in-home and out-of-the-home content experiences."

Streaming services have been gaining popularity in Australia, with Roy Morgan releasing statistics in May stating that 1 million Australians were using the Netflix service just months after launching in Australia and New Zealand.

Telstra announced in its FY15 results it was seeing growth in revenue in its overall IPTV business -- a category including the revenues from Foxtel, T-Box, BigPond Movies, and Presto -- of 3.4 percent, to AU$931 million. Foxtel alone increased by 9.4 percent to AU$662 million in revenue for the financial year, due to an increased number of subscribers after bundle price reductions. T-Box sales declined by AU$33 million, however.

Telstra's rivals Optus and iiNet both offered unmetered access to Netflix from its launch date in a bid to secure more customers.

Earlier on Thursday, Optus announced that it will also be throwing a free six-month Netflix subscription into its entertainment bundles for home broadband customers. The bundles include unlimited data and unlimited national landline calls, as well as the Optus TV 1TB set-top box with Fetch.

"Customers tell us they want an easy and flexible streaming experience that allows them to watch what they want and how they want, without the worry of frustrating data limits," said Vicki Brady, MD of Marketing and Product at Optus.

"They also want the convenience of a set-top box that gives them access to a world of entertainment without the hassle of juggling between sources, devices, and remotes.

"Our previous Netflix offer was hugely popular, and a big draw-card for consumers looking for a broadband bundle. Its comeback means even more Aussies can experience Netflix's award-winning original series and a diverse library of TV shows and movies from around the world."

The six-month Netflix subscription will be automatically added on to customers who sign up for any of Optus' three entertainment bundles, which start at AU$90 per month, between November 2 and January 31.

Local streaming company Quickflix has been haemorrhaging customers since the launch of Netflix, reporting a net loss of AU$8.6 million for the first half of the 2014-15 financial year, and a loss of 13 percent of its customers in Q2.

The draft legislation for the so-called Netflix Tax was released last week, however, which could cause a jump in pricing for the foreign streaming service. The Australian government will begin adding GST to all digital products and services purchased online, with plans to tax intangible goods including streaming services, apps, games, music downloads, and ebooks by mid-2017.

Former Treasurer Joe Hockey had claimed that such an amendment would raise AU$350 million within four years.

Australian companies Quickflix, Stan, Presto, and Foxtel have been supportive of the introduction of the Netflix Tax, as they claim it will level the playing field in regards to its competitor Netflix.

"The government's move to enforce GST for the supply of digital content services is the right one. The digital marketplace is an increasingly competitive space, and it's critical to ensure that all players that do business in Australia do so on a level field, with no one player advantaged through tax loopholes," Foxtel's group director of corporate affairs Bruce Meagher said in a statement in May.

"The introduction of this legislation will not only help to maintain consistency across the competitive landscape, but it will also ensure that Australia gets its due taxes from the companies that choose to do business here, which benefits all Australians."

The law governing GST on digital products, if passed, is set to come into effect on July 1, 2017. The Department of Treasury is accepting submissions on the draft exposure legislation until October 21, 2015.