Broadband is building - will content come?

Gartner telecommunications analyst, Geoff Johnson, said Tuesday that Australian carriers and content providers were "stealthily" getting about installing what he called "the boring machinery" essential to the business of broadband; billing and rights management systems that will turn content into dollars.

"The content providers can't sell unless the network people have got the infrastructure to receive it broadcast it and bill it," said Johnson.

"They need to be able to have another portion of the billing system to recognise that with certain content you have to pay Disney, the ABC, SBS, Fairfax, Sensis..." Johnson added later.

According to Johnson, telcos and ISPs are near-finished investing in broadband infrastructure -- now it is a matter of finding content compelling enough that its use would cover the cost of broadband carriage service for consumers.

The problem, said Johnson, was that in Australia -- unlike Korea and Japan -- "you just don't see truckloads of it about do you?"

However, there are indications that may be about to change. Fairfax Digital chief operating officer, Mike Game showed some of the enthusiasm for broadband content that has been absent among media organisations to date following the company's announcement Monday that it would re-brand its f2 network.

"We're putting some major efforts in to ensuring we're not just a narrowband Internet player," said Game, apparently undeterred by recent reports that local broadband affordability was still way behind other developed economies.

"I feel more comfortable now than, say, as recently as six months ago, that the pricing structures are going to move in a direction such that [broadband] penetration accelerates," he later added.

Game said it was "vitally important" that Fairfax's online division maintained its broadband content production.

Telecommunications industry analyst group, Ovum yesterday supported Game's view in the light of the Australian Competition and Consumer Commission's (ACCC) March quarter statistics on broadband penetration in Australia.

"With a critical mass of consumers now using broadband, the development of broadband specific content and services [in Australia] is becoming a viable business model," said Sydney-based Ovum analyst, Daniel Swift.

According to the ACCC, Australian broadband connections reached 829,300 for the quarter ended March 2004, and recorded the largest ever jump in new connections -- 130,600 -- for any one quarter.

"As you're approaching a million connections you've got something to take to advertisers," said Swift.

Fairfax Digital's Game said the company was exploring a number of ways to allow audiences to step around traditional free-to-air distribution, in both fixed-line and mobile platforms.

"We're involved in discussions and analysis looking at the different types of caching and compression technologies that would enable us to get our content to our audiences more easily without a third-party distribution partner," said Game.

It's unclear how soon we'll see broadband content on mobile devices, however Game indicated Fairfax Digital -- which recently entered a deal to provide Vodafone Live with news and sport content -- was keeping a close eye on Hutchison's 3G platform.

Gartner's Johnson said broadband content of interest to mainstream consumers was likely to be in the form of video clips of memorable sporting events -- such as those likely to come from events like the Athens Olympics -- and macabre spectacles such as the September 11 terrorist attacks in New York.

Fairfax for one appears to have pinned its hopes on the Athens Olympics to boost consumer interest in its broadband content offerings.

"We have resources on the ground in Athens producing video content that we will be distributing on our own sites and third parties," said Game.

Johnson said uptake of broadband services among business was currently leading in industry verticals such as logistics and courier companies which make use of location services.

However, Johnson cautioned that recent evidence of broadband take-off in Australia needed to be understood, in perspective, against the backdrop of the broadband settings fostered by some of our regional neighbours.

"In Korea they're not debating DSL the way we are now -- we're arguing about 250 Kbps DSL. They're focusing on their 20MBps EDSL service and they're working on 50M to 100M-plus Ethernet service".