Chaz Savage resigned as the head of TVNZ and Sky TV’s joint venture Igloo at the end of January, to take up the general manager role of Telstra’s T-box television division in Australia.
Savage leaves Igloo only weeks after launching the paid-TV experiment he helped develop over the past 18 months, and following months of delays to its launch.
I caught up with Savage to talk about Igloo, the New Zealand media landscape, and the awkward frenemy relationship Igloo has with Sky and TVNZ.
What caused Igloo’s delay?
It was of critical importance to make sure the core product was stable. Thankfully we’ve seen the fruits of that pain, things are going according to plan now.
Is the Igloo set top box software developed in-house?
We use a third party called Pace, based in the UK… The box is its hardware as well. [Pace] was our full end to end provider, bar the digital rights management component.
And would Pace have had something to do with the delay?
Yes, it’s fair to say they were involved in the delay. Speaking frankly, we all bit off a bit more than we could chew. Our second quarter [2012] launch date was probably very aggressive, from an Igloo perspective and Pace perspective.
But Pace said it could meet those deadlines. Even though it was aggressive, it was saying all the right things.
We had a chipset delay… It was a much bigger piece of work than people imagined it is.
(StopPress has contacted Pace for comment.)
Can you share any numbers regarding the number of Igloo customers since its launch?
Not at this stage.
What is Igloo’s biggest obstacle to market?
We’ve launched Igloo and the logo you see in the corner, now people need to understand what it is and why they need it. The challenge is a marketing one. We need to engrain ourselves around ‘cheaper-than-Sky more-channels-than-Freeview’, which is a simple enough proposition.
Secondly is developing the product. How do we make it more appealing? Personal video recording (PVR) is a very obvious one, but then we have to factor in our shareholder Sky, which already has a very succesful MySky HDi product. Would that canibalise that business?
Although the set top box isn’t PVR ready currently, it is able to become a PVR with an external harddrive or USB. Initially we held back that piece of functionality, but that’s not to say we wouldn’t make it available in the future.
Are there plans to expand Igloo beyond the set top box and into computers and consoles? Perhaps an app?
Absolutely. Our view currently is to walk before we can run, but we definitely are talking to other third parties in that space .
The [internet connectivity]in our box probably puts us in a better position even than Sky. Sky doesn’t have an [internet]capable box, it’s not in app land yet, or media centre land, or streaming land. Igloo would be a great product to roll out with UFB installs.
What kind of impact has the internet had on your business, and do you think companies like TVNZ, Sky, and Mediaworks are keeping up with the changes?
From a technology perspective [New Zealand media] is being left behind. Streaming directly to TV over internet is one area where if you spend half an hour in Sydney you might say we’re behind the times here.
What the internet is doing is making it a relatively low barrier to entry. Media companies can go straight to PCs. Over the next 12 to 24 months there will be growth by the incumbents in apps, mobile, and straight to TV.
There will also be more demand from consumers for these kinds of products as the technology penetration increases.
Do you ever get pushback from Sky (which owns 51 percent of Igloo) and TVNZ (which owns the other 49)?
You’d think we’d get more than we do, I’ve been lucky that Sky and TVNZ pretty much let me run Igloo how Igloo thinks it should be run.
Does that mean I can say come out and say Sky’s too expensive and Igloo is cheaper? No. It doesn’t mean I can go out and aggressively attack my shareholder, but on the same token I don’t have a gag.
You’re relocating to Australia for the Telstra role, was this a difficult decision?
It’s definitely been a difficult decision. Igloo, rightly or wrongly, has felt like a child to me for the last 18 months. To build something up to where the product is today, I still get a kick out of it.
The scale of the [Telstra] business and where it’s at today is a big opportunity for me personally, and an exciting opportunity for my family to relocate to Sydney. The realist in me saw this as an opportunity I have to take now.
Is there anything you won’t miss about the New Zealand media landscape?
I feel Sky gets a massive beat up in this market. People tend to look internationally and ask ‘why can’t I have what they have?’ People lose sight of the size of the market here, and the problems Sky have.
When you’re developing things in a market of 25 million versus 4.5 million, economies of scale come into play. Spending $10 million in Australia with a captive audience of 25 million is one thing, when you come to New Zealand and you still need to spend the $10 million for 4.5 million people, it’s a lot trickier.
Sky Sport for example is outstanding value, but you’ll very rarely ever hear a person say that. I look at a channel like Soho which is ten bucks and think that’s great. I don’t think it’s naivety, and it’s not necessarily ignorance. Sometimes people just don’t like paying for things, and it’s as simple as that. Unfortunately we need to pay Dan Carter and all these people millions of dollars to play sport in New Zealand, and the only way to do that is through pay TV.
