FYI | Apr 10 2006
A particular snippet caught my eye this morning, from the Sydney Morning Herald’s "The Guide". It reported television producer Mark Burnett was speaking at an industry conference in Cannes last week when he said "My kids don’t know what a TV network is anymore".
Apparently the only thing Mark’s kids watch is TiVo, which I learnt is an "American personal video recorder", similar, says Mark, to Foxtel’s IQ. Both systems allow available programs to be watched and the ads skipped over. This is not something free-to-air networks like to contemplate.
Earlier in the weekend my Saturday morning was kicked off with "Telstra in cut-price war with net rivals" emblazoned on the same paper’s front page. It seems Telstra (TLS) is launching flat-fee subscriber access to unlimited local and overseas calls. This is in response to broadband-delivered VoIP (voice over internet protocol) which allows phone calls to be made for next to nothing over the net.
Only last month (before the FN Arena news service began) I was writing in another publication that FTA TV was a relic stamped "soon to be extinct" and that your eleven year-old children are disinclined to bother with it given all the other technological options abound. For some time that publication had been highlighting the rise of "new media".
I have also been critical of governments, past and present, which have been so slow to move on new media and so intimidated by dinosaurs of the industry that Australia trails well behind its peers in grasping and adopting new technology.
At the ABN Amro Communication Conference last week Fairfax (FXJ) CEO David Kirk was, it seemed to me, trying very hard to be polite to Communications Minister Senator Helen Coonan in respect of upcoming media reform when he noted "She is an exceptionally able minister, who is across the issues and who is working hard to find consensus on the important public issues involved".
Kirk went on to say, in respect of digital datacasting, "But if these are stillborn as services because of rules that are too restrictive – just as datacasting was neutered five years ago – then that spectrum will lie fallow for many years to come." It’s always nice to praise your combatant before sticking the boot in.
The government has held back communications advances with its dithering and ill-conceived policy-making for the last 20 years. In the meantime we have a media industry heavily weighted to, and protective of, old media concepts. Sure, change is afoot, but most analysts can’t see anything being resolved in the industry before the 2012 ultimatum set by Coonan.
2012? Richard Branson will probably be offering joy flights around Venus by then. (Don’t take any luggage – that’ll end up on Mars, believe me). What we’ll have in between will be an awful lot of "discussion" amongst media incumbents, while a different bunch of go-getters will move swiftly and successfully into the new age.
Rupert Murdoch has already suggested he is the last of the great media moguls. Kerry Packer is no longer with us, and that no doubt was a path cleared for the government. Some FTA TV networks have been positioning themselves to capitalise on new media, while others are hanging on to antiquated tele-with-ads.
Fairfax is another organisation that has been forward-thinking. Years of speculation that a relaxing of media ownership would see Packer trying to buy Fairfax, or Fairfax trying to buy Channel Nine, were put to rest by Kirk who said emphatically "Fairfax is not in the television business". However, he did signal that if the government can get off the FTA TV life support bent and provide for the "robust development of services", such as pay TV, mobile video services and narrowcasting, then Fairfax Digital is in the game.
The key, Kirk suggests, is broadband. He urged the government to "ensure that there are the most aggressive policy settings in place to promote broadband development".
Will this happen? Will such promotion occur before 2012? This takes us back to Telstra. The reason Telstra needs to offer phone call packages is in order to arrest the slide of fixed phone line renting. Rental charges are Telstra’s bread and butter. Although Telstra does have plans to introduce VoIP at some point, it is way behind the likes of Skype (created in Luxembourg) as well as Engin and Freshtel locally.
And it seems ninemsn and Yahoo! have plans for similar services, which ties us nicely back into TV once more.
Telstra’s attempts to hang on to fixed lines is akin to record companies spending squillions fighting downloadable music files. In the end the record companies realised they couldn’t hold back the tide so they figured out how to go with it. I already know people who have cancelled their old fixed line service for the simple reason that mobile packages are already cheaper for many users. That’s before one even contemplates VoIP, which is also ridiculously cheap. Telstra has a tough time ahead.
If the government does go out of its way to speed up broadband services (and indeed, to speed up broadband) then it has a dilemma. While Telstra was a slow starter on broadband it has now picked up its act, but any developments to allow improved broadband elsewhere will only be a further threat to Telstra’s existing earnings base and antiquated technology.
The government still owns 51% of Telstra – a "shocking investment" according to Mr Costello – and it still has delusions of selling its final stake. Will the government allow Telstra to be challenged further?
It’s all one big mess mark Burnett’s kids are oblivious to. As long as they’ve got TiVo they’re happy. But it will be today’s youth that will call the shots in the lead up to 2012.