Telstra is set to deliver content spanning movies, sport and entertainment over an IP based network using a Microsoft IPTV offering. They are also set to move into the Retail TV market using IPTV technology. In addition storage company EMC has taken over the day to day management of Telstra’s storage operations with executives of both companies planning the launch a daily back up solution for the SMB & home market which could cost as low as $2.00 a day to back up a home or office PC.
“We are now managing Telstra’s storage operations and plans are afoot to deliver several new services said Jordan Reizes. Another senior EMC executive said “We hope to deliver a program whereby we can back up thousands of PC’s and servers every night over Telstra’s broadband network”.
The new initiatives are part of a major thrust by Telstra to establish new revenue streams based on delivering content and services over an IP based network. The company is also set to launch a digital home gateway that will allow the telecommunications carrier to generate revenue from SmartHouse services spanning Voice over IP, broadband, automation and the delivery of entertainment content.
The new IPTV service for the home will be delivered via a set top box which consumers will pay a one off fee of around $300. They will then pay up to $5.00 for a 1st run movie as well as a monthly fee for other content.
The service is expected to be launched in connection with the introduction of Telstra’s new ADSL 2 broadband service. The success of the service is based on click revenue and could well see Telstra in conflict with its partners in Foxtel.
The Telstra Retail TV initiative is being developed with several outside partners who are looking to deliver content into retail stores, shopping malls and places where the public congregate. Telstra will supply managed services, storage and bandwidth for a monthly fee. They will also manage a network of devices spanning plasma and LCD screens inside retail stores. The Retail TV services will be delivered by Telstra’s Business and Government Division headed by Managing Director David Thodey. The IPTV software will allow Telstra to deliver content into commercial enterprises spanning shopping malls and a variety of retail outlets. Telstra’s Business and Government Division will be able to utilise its network of 4,200 service and support personnel to support the network of screens and remote servers that will be connected to a network of information and training touch screen and large end of aisle advertising screens.
Partners will deliver advertising and infomercial content to retail stores across Australia. The Retail TV move could have a devastating impact on free to air TV as many major brand advertisers are starting to invest their marketing dollars in retail in-store marketing where research shows 75% of purchase decisions are made. Among supporters of the network are Proctor & Gamble, Unilever and Nestle. In recent tests in the UK advertisers reported increased sales of up to 30% when advertising was exposed in store as opposed to on free to air TV.
Microsoft’s IPTV offering has been tested by Telstra for several months with the deal to use the Microsoft solution finalised late in 2004.
According to the Australian Financial Review TV Telstra is negotiating partnerships with major commercial television networks and key Hollywood film studios as it ramps up to deliver. In recent months Telstra has been secretly briefing some of the big networks on its plans. Say the Financial Review.
Telstra’s confidential pitch to the commercial TV networks, a copy of which has been obtained by The Australian Financial Review, reveals that its plans to offer IPTV to its retail customers are far more extensive than previously believed.
The approaches to the networks by Telstra, a 50 per cent shareholder in Foxtel, are believed to be without the knowledge of its fellow shareholders in the pay TV group, Rupert Murdoch’s News Corporation and Kerry Packer’s Publishing & Broadcasting, which is set to reignite tensions on the Foxtel board.
It will also raise questions in the lead-up to the federal government’s sale of its remaining stake in Telstra about the company’s aspirations in the media sector after its failure last year to take a controlling stake in John Fairfax Holdings.