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Telecom spills more details on its streaming video service, Lightbox

UPDATE: Scroll down for NBR's interview with Telecom Digital Ventures digital media head Simon Hoegsbro.

EARLIER: On the heels of Sky TV confirming a Netflix-style offering, Telecom [NZX: TEL] has spilled a few more details on its streaming video service — which will offer all the TV shows and films you can eat, delivered on-demand over the internet, for a fixed monthly fee.

But a number of elements, including the final content lineup, remain under-wraps. Sky and Telecom are both in a race to be the first to launch first, and wary of revealing too much of their hand to their rival.

Telecom' service will be called Lightbox, and launch "in a few weeks". You can sign up for updates here.

It will cost $15 a month — a touch more than Netflix and local contender Quickflix (whose 2013 annual report says it has 101,852 paying customers across Australia and NZ. It does not break out an NZ number. Quickflix launched streaming in 2011. Estimates of the number of NZers accessing the US-based Netflix, which has 48 million subscribers worldwide, range from 30,000 to 100,000 and beyond).

As previously flagged, Lightbox will be open to customers of any ISP — a move that broadens its appeal, but eliminates the potential to use it as sweetner, as Telecom does with Spotify Premium.

There will be a 30-day free trial. As with other streaming video on demand services, there are no contracts.

5000 hours of content will be available at launch, but it's the number of A-list shows and movies that punters will be focussed on. As Quickflix learned, if you make a bad first-impression, it lingers long after you've expanded your lineup.

There's no indication of movie studio deals so far.

Telecom has confirmed three TV series: Mad Men (also appearing elsewhere) plus the exclusives Vikings and 24: Live Another Day (the reboot of Keifer Sutherland's 24 franchise).

That's not going to be lure the small army of Kiwis accessing iTunes US or Netflix, or knock over Quickflix — the increasingly capable Australasian contender that recently added a slate of new series including the aforementioned Mad Men. But expect more content announcements a Lightbox's launch date gets closer.

There are no plans for original content.

Telecom says the service will be "accessible cross multiple devices, including laptop, desktop, iPad and Airplay on Apple TV."

Apple TV is a crucial one. Apple's low's low cost wi-fi widget is the way many people watch US iTunes extensive mix of TV series and movies, or to access Netflix locally (Netflix, like Hulu, HBO Go and others, has an app on Apple TV). Plug an Apple TV into your telly, and you don't have to stuff around with extra devices to watch broadband delivered content on your regular television). Lightbox will not have an app on Apple TV — the easiest, no brainer way to access broadband TV on your telly.

Neither will Lightbox have Android tablet support at launch.

As with Sky TV's pending streaming video on demand service, key detail are missing such as the full content line up, the launch date.

Telecom has confirmed it will allow up to five devices can be registered to each Lightbox account, and two shows can to be played at once, "so you can watch the latest drama series in the living room while your kids sing along to their cartoon favourites in their bedroom." That's a lot more generous than Sky's existing steaming product, Sky Go, which is restricted to two devices and one live stream.

Sky has says its (so far un-named, un-priced) Netflix-style service will work on two levels. One will essentially be an extension of the Sky Go offering already available for tablets an computers. The other, which could follow later, will make it accessible through a MySky decoder.

The $12.99 a month Quickflix — currently the gold standard in multi-platform support, including Xbox, PlayStation, iOS and Android apps and multiple brands of smart TV — is lining up a deal that will see its ondemand content accessible through a MyFreeview box. NBR understands support for Google's low-cost Chromecast wi-fi widget is also in the works.

The content war
It's important for any new service to be user-friendly.

But at the end of the day, content is king. In the olden days, no one would sign up to a new video rental on the block that only had a handful of tapes on its shelves. Same goes for online.

We do know that in the short term, Sky TV's Netflix style service has the potential to blitz Lightbox, and all-comers. Last year, Sky TV spent $666 million, $289 million of that on programming. Telecom has told shareholders it will spend $20 million on Lightbox in the service's first year. That's all up, including operational spending, marketing and programming.

But how much of its content will Sky choose to marshal behind its Netflix-style service?

CEO John Fellet has strongly hinted Soho (home of Sky's HBO shows) and movies will be included, but has been fuzzy on details — no doubt wanting to see Telecom's full lineup before committing to how much of his core content he'll cannibalise. The only thing he will say is that sport is off the table.

Go hard or go home
CEO Simon Moutter made it clear he would not "bet the farm" on the new service.

And it's sensible to use Lightbox first year of operation to test the waters and get all systems working smoothly.

But in years two, three and beyond, I think it will be a case of go hard or go home.

A dramatic increase in Lightbox content budget could push streaming video into the mainstream, and transform the way middle New Zealanders watch television.

But if it stays around the Quickflix level, it's not going to tempt the existing streaming crowd, let alone tempt the non-technical masses to take the plunge. Will Simon Moutter and his board have the stomach to write some big cheques to content makers and distributors? (And will shareholders get nervous — bearing in mind we've already seen the Todd family sell its 11% stake in Sky last year, possibly over qualms about the looming over-the-top contetn war). Big decisions lie ahead.

As ever, Sky TV boss Fellet is in fighting mood.

NBR understands that Coliseum Sports Media wants to expand its PremierLeaguePass service to include European football next year, but that Sky TV is bidding four times what it has before for rights. Expect similar aggression is Telecom or any other contender makes a play for Game of Thrones, or any of the other HBO crown jewels in Sky's traditional broadcasting lineup.

Lightbox is another of the children of Telecom Digital Ventures, the Rod Snodgrass-headed division whose stable also includes budget mobile brand Skinny, stripped-down ISP sub-brand Big Pipe, Telecom's phone box wi-fi network push and pending moves into areas like home automation.

From here, it looks like Mr Snodgrass and his crew have a tricky task. Early adopters are already using geoblock-busters to pig-out on Netflix and iTunes US. Sky's lock on sports will keep most of its traditional viewers loyal. And with Sky's Netflix-style service matching Lightbox, it will be hard to convince Sky subs to pay for Lightbox action on the side.

And Lightbox is launching into an increasingly complex world of content, where options are proliferating wildly. Beyond those already mentioned above, Sky TV-TVNZ joint venture igloo is stumbling along, TVNZ and MediaWorks are expanding their ondemand content, Google is experimenting with HDTV through YouTube (notably with Indian cricket and Wimbleton tennis), and of course beyond those choosing to pay for Netflix, Hulu, US iTunes etc, many simply still help themselves through peer-to-peer pirate services (egged on by the movie and TV industries' failure to lodge a single complaint under the new file sharing law). Interesting times.

POSTSCRIPT: What's in a name?

Telecom originally called its streaming service ShowMeTV, but dropped the name after a challenges from TV shopping operator Show TV and TVNZ.

It registered Spark TV — but that name had potential to cause confusion, given Telecom will change its name to Spark in August, and Spark TV would deliver the wrong impression that the service would be open to the company's own ISP customers only.

Now it's settled on Lightbox. I'm not 100% sold on that one. Coming from a publishing background, I immediately thought of a real-world lightbox (what we used to use for reviewing negatives). I immediately thought it better suited to a photo or picture sharing service. Still, maybe it will play better with Joe Public, and at least they didn't join the "flix" crowd (Netflix, Quickflix, Ezyflix).

UPDATE: A couple more details emerged in an NBR interview with Telecom Digital Ventures digital media head Simon Hoegsbro.

Lightbox will be available in high definition (where original content is in HD format). There be no price premium for HD content (an option Sky TV is still pondering for its pending Netflix-style service).

Sport won't be a focus. Telecom is in talks with local content makers and distributors, but there's no confirmation of any local content at launch.

Telecom has no immediate plans to commission any content.

The company is in talks with TV makers, and eyeing game consoles and apps for platforms like Apple TV, but at launch it will likely be the case of an iOS (iPad) and PC apps. Mr Hoegsbro had only tepid interest in an Apple TV app; he saw most people happy with streaming content to a TV from  a tablet. Different people had different preferences, in the long term Telecom would try to support as many devices as possible.

Mr Hoegsbro declined to show NBR a preview, citing commercial confidentiality. Customer targets and year two and three plans are also being kept under tight wraps.

NBR understands Telecom research indicated around 90% of homes had access to good enough broadband for streaming video, with the proviso that copper broadband households face challenges if more than one person is accessing as demanding internet app at once.

Telecom will meter Lightbox data. Mr Hoegsbro says increasing data caps and unlimited plan update makes it a non-issue. It'll be up to other ISPs whether they could Lightbox content toward a monthly cap.

He expects quick uptake initially as tech savvy people jump onboard (though won't specifiy numbers), then that it will be tougher going from there.

Mr Hoegsbro acknowledges many already get their streaming fix from Netflix and other offshore services. He says Telecom, hosing locally, will provide faster, more reliable service.

What do you think? Who will be the winner in the video streaming wars?  Click here to vote in our subscriber-only business pulse poll.

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Comments and questions

Many kiwis also watch Netflix, Hulu, Amazon Prime and a whole lot more on a Roku streaming player. They are smaller and cheaper than an Apple TV and with support for more stations/OTTtv applications (more than 1,000).

And Google Chromecast (now officially released in Oz) is a good one for people who want to wrangle the action on their telly from their tablet. See some Kiwis are also ordering in Amazon TV. Options are proliferating.

Content, reliabilty and pricing is what matters

You mention "Airplay on Apple TV" for Lightbox.

This doesn't mean it will have an Apple TV app necessarily - it usually means you can stream from your iPad, iPhone etc to the Apple TV. So you'll need a device in order to send the show to your TV.

Apps for the Apple TV are few and far between which has always been a shame - still waiting for a Premier League Pass one...

Thanks for pointing out that nuance. Seeking clarification from Telecom.

Update - you were correct. Airplay support but not an Apple TV app, and not much interest when I raised the issue.

I would like to see other content besides TV and Movies, like CNN, BBC and other documentary channels like History, Discovery etc before changing to Telecom from Sky TV.

Telecom has basic trust issues to overcome with NZ public

Most would rather go with reliable + reputable vendor

Lot of people got burnt with Tivo drop + run rubbish

I still love my Tivo - so much better than what they are selling in the stores at the moment, my friend was very disappointed she could not get one anywhere and the piece of crap sold to her is very unreliable but the only thing all the stores are selling. Go the internet and internet TV

Hi Anon. I also have (three) Tivo's in my home and like you, I believe their useabilty and functionality is unbeatable.
While you are correct in that you can't purchase new Tivo's in a store anymore you will find that they are available on TradeMe most of the time and obtainable at very good prices. At times even new ones are still being listed on TradeMe.

(Note also that Quickflix is accessible via Tivo's).

And yet you still cannot buy TV episodes from the NZ Itunes store - where's the content Apple???

Tied up with Sky

I think the music industry, or at least the commercial end of it - pop music, is much more of a single global market, dominated by US acts.

With TV, local content, news and sport tend to be the highest raters.

There's nothing to stop Netflix carrying NZ local content if it sets up shop here, or from afar. But Sky TV would and could fight much harder for All Blacks rights than any local contender did in the music space.