NZ media and telcos ponder future
If you grew up watching YouTube, would you watch TV and Movies?
That was the question posed by Travis Corrie from Shift72, a Hamilton-based company providing end-to-end video solutions for global brands such as Lonely Planet, at the TUANZ Digital Convergence Symposium this week.
In a world where streaming subscriptions have overtaken paid TV subs, the millennial generation is turning to new forms of entertainment, such as esports. This is where professional gamers slug it out in multi-game contests, often for huge prize money. As Corrie pointed out, the two Warrior players to have competed on the largest global stage are CoverH and Twizz (also known as Chris Hunt and Sam Pearson). They took part in the Fortnite World Cup tournament in New York last month, where they came last in the 'duos' section but still managed to earn US$50,000.
The Warriors announced a partnership with Blank eSports in May this year, its CEO Cameron George noting that with 427 million people worldwide watching some form or esports, it was a "no brainer to have a presence in this growing industry." The Fortnite champs is probably a good bet as, according to Kurt Rogers from Chorus, its responsible for the biggest surge in traffic on its network whenever a new version of the game is released.
But where does that leaves the telco and media companies, who must be hoping that CoverH and Twizz won't be the only ones to profit in the world of fast connectivity?
The two largest telcos, Vodafone and Spark have chosen different content pathways.
Vodafone Consumer Director Carolyn Luey says it wants to be the content aggregator. This week it announced the latest iteration of its Vodafone TV box, which now has embedded Wifi. It comes pre-loaded with Sky, Netflix and TVNZ OnDemand, among others (not Spark Sport, see here for why). You don't need to be with the telco to buy the box, but Luey says preferable have a fibre connection.
Spark, on the other hand, has made that big move into sports, headlined by its acquisition of the 2019 Rugby World Cup rights. Among the many challenges of streaming the tournament, according CFO and Executive Lead for Spark Sport David Chalmers, is that rugby fans are generally not early adopters. The pricing strategy (earlybird specials) is designed to give the streaming laggards time to get up to speed with the tech. If a punter has a terrible experience, even if it's down to a poorly performing modem, "a degree of blame will come to us," Chalmers says.
He also pointed that Optus across the Tasman has, despite well-publicised issues with delivering streaming sport, persevered in its content strategy because the move to OTT (Over the Top) is inevitable.
Which may not be great news for traditional broadcasters, so what approach are Sky TV and TVNZ taking?
SkyTV's new CFO Blair Woodbury began a short presentation with an advert for Sky Sport, before noting that "people come for sport, but stay for entertainment". He said the company is open to wholesaling its content and he didn't rule out the company entering the broadband market.
TVNZ CEO Kevin Kenrick was quick to defend traditional broadcasting, noting that over two million New Zealanders watched TV last Sunday, although On Demand is growing its audience. Kenrick says TVNZ isnt hung up how the audience tunes it, they just have to "find a way to turn eyeballs into dollars."
TVNZ has persuaded the Government to forego its annual dividend, and instead the money will be used to invest in local programming. It's maybe one area where the likes of Facebook and Google can't play, although if they ever did want to fund NZ programming they could probably do so "out of the spare change that fell out of the back of the couch," says Kenrick.
NZME CEO Michael Boggs also has to contend with the global OTT players which have gobbled up so much of the local advertising spend. He outlined the company's response, noting the initial success of the NZ Herald paywall. It launched on 30 April and reached 10,000 paid subscribers in six weeks.
The Washington Post is providing the tech for the paywall. The great US masthead is of course owned by Jeff Bezos, the founder of Amazon, which also owns Twitch, the company at the vanguard video game live streaming. Which is, you know, where we came in.
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