Telstra partners with Fetch in an effort to increase streaming potential

After failing to become a major player in the Australian video streaming market, Telstra hopes to change things up with a stake in Fetch TV. Paul Budde reports.

LIKE MANY telcos around the world, Telstra has been floundering in the video streaming market for the past few decades. It will be interesting to see if the acquisition of his 51% stake in content aggregation company Fetch TV for $50 million will be a fresh start.

Over the last 25 plus years, its activity in the market has gone through its original 50% stake in Foxtel (currently stands at 35%). The company started in the 1990s as a pay-TV company. Telstra’s participation is a defensive position that does not want to see some media companies, namely News Corp., too successful in this market.

It could be argued that the strategy worked because Foxtel was never able to reach its full potential. The original goal was to have a market penetration of 75% by 2000. It was never able to reach more than 30%.

However, by following a defense strategy, Telstra was never able to become a major player in the video streaming market. By the time Netflix arrived on the market, Telstra had lost its advantage as a national telecommunications operator to add video streaming as a significant revenue stream generator to its retail product portfolio.

Foxtel struggles in the streaming market

It has made several half-hearted attempts through a proprietary based system but none of them have worked. The system they are currently using is Roku. The problem with this platform is that for a relatively small group of users, you still have to invest in the ever-changing technology. More investment in Roku is needed or not, see other solutions again.

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Roku as a technology company has been struggling for a long time and the company is at a loss, so the writing on the wall is for Telstra. They better jump ship now.

This is where Fetch TV comes in. The company has always positioned itself as a neutral content aggregator and telecommunications companies can use this service on a wholesale basis. Optus, TPG, Aussie Broadband and Vocus are the main users of this platform and Telstra will now join them.

It will be interesting to see how this will work out as retail users of Fetch TV are all competitors. However, recent changes within Telstra have seen a structural shift in its operations where the wholesale strategy takes a much more prominent position within the company’s overall business strategy. This can be seen from the increase in sharing facilities, both on cellular and fixed networks.

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This is a fundamental change in the company’s business culture, which since the liberation of the market in the telecommunications market that began in the 1980s has been based on making life as difficult as possible for other telecommunications companies.

So, with this in mind, it’s possible Telstra’s involvement and change in business strategy could give Fetch TV a much-needed boost that could elevate the service to a more prominent place in the overall video streaming market in Australia. Currently, Fetch TV has less than 700,000 subscribers. With Telstra onboard another 800,000 users will be added. Still far below Netflix, Stan, Amazon Prime, Apple and Google.

I can’t help but think “what if”. When Fetch TV launched in 2010, it tried really hard to get Telstra too. If that happens, the Australian telecommunications industry combined will be in a much stronger position to fence off overseas video streaming companies. Not by taking it directly, but by providing a neutral content-based platform for all content providers.

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While other video streaming companies can all get a prominent position in smart TV, Fetch TV is not big enough to get the same position, with Telstra in it, that situation may change.

Changing the deal could affect Foxtel and Stan in Australia

As a Fetch TV user, I may be biased, but I’m also very impressed with the service. Fetch TV has been able to survive the onslaught of overseas video streaming and with Telstra now finally joining the company, it’s a testament to the fact that it has the right vision, the right technology and most importantly, the stamina and tenacity to stick with its wholesale business. strategy.

I imagine that Foxtel will also be available on the Fetch TV platform. Telstra customers currently have access to Foxtel via a Roku decoder and it is hard to see that they will be able to bring their subscribers to Fetch TV without providing access to Foxtel. I wish there was a back room deal, otherwise Telstra wouldn’t have done the deal with Foxtel. But I’ll admit I’m just guessing here because neither Telstra nor Foxtel provide any information on this.

In a separate announcement, Fetch TV has started rolling out its newest decoder, the Mighty Gen 4 Personal Video Recorder (PVR). It offers advanced multi-room features including the ability to stream free-to-air channels to a Fetch TV box located in a room where an antenna is not available. And it is interoperable with their early version of PVR.

Paul Budde is an Australian Independent columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consulting organization. You can follow Paul on Twitter @PaulBudde.

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