Developments in the past couple of weeks will cause a bit of consternation among the pay TV operators.
Subscriptions to high-speed internet connections have overtaken those for dial-up. Australian Bureau of Statistics figures this week show that nearly four million households and businesses have high-speed internet connections, doubling in the 18 months to September.
Perhaps the main reason for the explosion is that there is so much good material on the internet, in particular podcasting, where you can download broadcast material to be listened to on you ipod or MP3 player whenever you want.
It is true that Australia’s idea of high-speed internet is pretty slow by international standards and that it is unlikely to get very much better anywhere but in the CBDs of the main cities. This is because Telstra abandoned plans for a national broadband network after it could not extract from the Government a deal over what it could charge competitors for access to it.
But as is so often the case, where governments and regulators fail, technology and the market step in.
Two technologies are on the way. One is new video compression and the other is new wireless transmission. It means your computer can stay in the study and the TV in the lounge. You put a box next to the TV which receives compressed video – movies, new and old TV shows — over the internet.
Let’s couple this with another recent development. The ABC has set up a new division, ABC Commercial. It will look at commercialising the vast amount of ABC content. In particular, it will look at charging for downloads of archival material – sound and video that is more than a week old. Sound it can do immediately. Video it can do now but the quality is poor, but with the new technology it will put a huge amount of extra broadcast-quality content a click away.
The Australian pay TV operators must be quaking. Why would viewers subscribe with a monthly fee to a limited range of material when they can pay for only what they use from a huge range of providers (the BBC included) of quality content, and trash for that matter?
The new high-quality internet delivery of television will castrate the Government’s regulation of media.
At present only a handful of providers can afford the satellite and cable platforms to deliver pay TV. They can be easily monitored. The pay TV regulations limit a foreign owner’s stake to 20 per cent; demand that 10 per cent of a drama channel (including children’s programs) be Australian made; prohibit R-rated material; and limit advertisements.
Those regulations will be impossible to police with internet delivery.
An interesting question will be the delivery of sport. The demand for “live” sport is high. It does not matter much when you watch a movie, a documentary or other show. Even the news can be a few hours old. But if the sport is not “live”, for many, the excitement is gone. The big sports will presumably still attract big dollars, the question is whether existing operators will lose to internet delivery. Certainly internet delivery may mean more coverage for minority sports and women’s sport which gets almost ignored by the big free-to-air and pay TV operators.
As for free-to-air, the ink is not dry on the Government media “reforms” which continue to protect the three commercial free-to-air operators.
Governments of both complexion have feared them and protected them for decades. Dealing with ABC Commercial in the age of internet television will present the Government (particularly the Howard Government if it is still around) with a quandary.
In the past, the economically dry Howard Government has stamped on commercialising of the ABC. This is contrary to the Government’s usual privatisation ideology because advertising on the ABC would drain dollars away from it media mates who own commercial free-to-air stations.
What if the new ABC Commercial were to release – at a low price — the huge database of ABC programs over the internet when the technology permits easy high-quality transmission and viewing? That would take eyes and dollars away from commercial free-to-air. Maybe the Government would insist on high pricing or even prohibit release.
But there is a case for free release.
As the former staff-elected director of the ABC Quentin Dempster argued, taxpayers have already paid for the material and should not have to pay twice.
But the ABC might argue that the ABC already sells its content through the ABC shop where you can buy video and audio on CDs. Against that is the argument that consumers are paying for the cost of putting the stuff on the CD and the cost of retailing it. If the material is already on the ABCs computer servers and the consumer is downloading direct to a computer, the cost should be minimal.
The Australian Bureau of Statistics now works that way. It used to charge for statistics when they were delivered on paper – mainly to recover costs. When it evolved to an on-line operation the bureau was so in the habit of charging that it continued to charge for downloads – at the old paper rate.
That seemed a bit rich given that the statistics were compiled from information provided (at a cost and under compulsion) by taxpayers and businesses. The bureau finally recognised this and downloaded statistics are free. And the nation is better for it. It is more informed and businesses can make better decisions.
Maybe the ABC will think that way.
If so, not only will pay TV operators have something to worry about, so will the commercial free-to-air providers.
In any event, it will not be long before television in Australia changes radically for the better. And for that you can thank technology. The improvement will come despite government regulation, not because of it. The technology will have made the regulation obsolete.