Orcon CEO thumbs nose at Sky TV, signs up for Netflix

Orcon's Kim Dotcom event Thursday turned out to be pretty much a straight advertising campaign launch - albeit with some intriguing comments from CEO Greg McAlister about why the ISP can't embrace the giant German's war on data caps.

But there was an interesting aside after the main speeches as Mr McAllister discussed uses for faster internet, and larger data caps.

"I got Netflix working at home last night, piece of cake, because I read an article somewhere on how to do it," the Orcon boss told NBR.

Netflix the US online service that lets you stream unlimited TV programmes and movies for $US8.95 a month. You can watch them on your regular television if you've got the right wi-fi gadget (such as Apple's $159 Apple TV box, which has both Netflix and Hulu apps if you sign in on a US account). In the US, according to Wired, the street-legal Netflix now accounts for more internet traffic than BitTorrent services, often used for shady sharing. Given the choice, it seems most people will do the right thing.

Sky TV has recently taken a front-foot approach, requesting that lines about how to connect to Netflix be removed from an Eric Crampton article.

But it might be the proverbial case of a finger in a leaking dyke.

The flood of Netflix explainers includes an article on Orcon's website - a step-by-step guide to beating Netflix's geo-blocking, which ordinarily stops those outside the US from signing up for the service.

The guide is not hard to find.

We've seen Sky TV spring into action before, giving HBO a nudge after US series Banshee was made free online to Kiwis.

And the pay TV broadcaster took advice over the new, free Global Mode option offered for Slingshot customers - which allows people to access geoblocked services such as Netflix.

Slingshot's owner, CallPlus, took legal advice before launching Global Mode, and it's still offering the opt-in service (another ISP, Maxnet, dropped its short-lived global mode; it's new owner said it didn't fit with its focus). In a stance that could inspire a Tui Billboard, CallPlus says while any Slingshot customer can enable Global Mode with a click of their mouse, the service is designed as a convenience for overseas visitors to NZ who are accessing the internet via a Slingshot account.

Music industry gets it, TV/movie makers don't
There are other options for people who want to access commercial content blocked to New Zealanders, including accessing the US, UK or Australian versions of iTunes. My personal set up is to have a Freeview PVR, then pay for various TV series and movies through iTunes. I'm happy to pay - and believe me I shell out a lot to Apple and HBO and others each month; I just want the ability to pick and choose rather than a flat fee subscription. I respect copyright; old-world restrictions on distribution not so much. 

Orcon CEO Mr McAlister picked up on this theme Thursday, telling NBR:

"The music industry has moved on. Spotify is available globally, But the video houses haven’t sorted that out yet, and largely because there’s an incumbent in New Zealand that controls video content, which is Sky, where there wasn’t an incumbent controlling music content."

Sky TV does have a corner to fight. It's not like Telecom, which inherited a monopoly. Its investors took risk, and lost a lot of money, building up its (now very profitable) audience and content lineup. And content is not simply a case of you-can-have-it-or-you-can't, but a complex series of availability windows. And CEO John Fellet repeatedly points out that all-comers can bid against it for content.. as Coliseum Sports Media did with English Premier League rights.

Regardless, the Commerce Commission is currently investigating Sky TV's content partnerships with ISPs and, more pointedly, whether Sky TV's content deals prevent new market entrants from gaining a critical mass of content (and new market entrants would include QuickFlix and EzyFlix; ISP partners include Vodafone, which yesterday launched the Vodafone TV Digital Recorder for UFB).

Among other arguments, Mr Fellet faces a new technology threat from so-called "over-the-top" content providers like NetFlix and YouTube.

It's easy to speculate the pay TV provider might only be saying that to get the politicians off its back (and Michael Wigley has even suggested Sky TV is played a cunning "tall dwarf" game by not bidding too hard for English Premier League rights, allowing the loss of a minor sport to give the appearance of competition).

And certainly, in the short term, immediate threats aren't obviously. QuickFlix and Ezyfliz have thin (if growing) libraries, and while Netflix took a look at launching in NZ, it went away again (the company cited our data caps, but it could easily also have referenced Sky TV's multi-year look on a lot of the juiciest pay TV content). And as well as the aforementioned data caps, most NZ homes just don't have the bandwidth to stream Netflix, at least cleanly in high definition (Mr McAlister is one of the lucky ones, close enough to a cabinet to get 14Mbit/s down on a VDSL connection).

But the irony is that, long term, Mr Fellet is quite right - new technology platforms do pose a potent threat. No wonder the broadcaster is getting increasingly antsy about  media mentions of Netflix.

ckeall@nbr.co.nz

Follow @ChrisKeall