Spark Ventures' Lightbox subscription video on demand service (SVOD) officially launched last night, and, not surprisingly, its arrival seems to have been the catalyst for a fair bit of activity in the streaming space, with TVNZ now offering online box sets of Orange is the New Black, Freeview's Sam Irvine talking up an integrated broadcast and broadband offering, Quickflix claiming that more competition is a good thing and Sky, which recently announced another big profit increase, getting set to launch its own streaming service for non-Sky customers. So who's got the best offer?
Lightbox launched with numerous mentions of the term 'insanely good TV', a 30 day free trial and more exclusive content, including pirate drama Black Sails, legal series Suits, comedy-drama series Franklin & Bash, paranormal hit Lost Girl and pre-school animation 3rd & Bird. These add to shows like Outlander, 24: Live Another Day, Vikings, Alpha House, Breaking Bad, House of Cards and Orange is the New Black. It says it has signed a local content deal, but that is yet to be announced.
It's certainly a good line-up and Spark appear to have got quite a lot for their $20 million (some of which was initial set-up costs). It doesn't have movies—yet—but it's already more enticing than Quickflix's TV offer. Although, as Sky's chief executive John Fellet said in an story that appeared in NZ Marketing: "The easiest part is buying the content. The tricky part is figuring out how to make enough money to pay for it."
Spark chief executive Simon Moutter said recently it hopes to get 70,000 customers by 2015.
Lightbox's parent company Spark made a commitment to reward existing customers as part of its recent rebrand, although not everyone's impressed with its efforts, and Spark home broadband customers who sign up to Lightbox will receive six months at half price (customers can click here to get the deal). The offer is in addition to the 30 days free that all Lightbox customers are entitled to.
“It’s great to see Lightbox using the power of the Internet to give New Zealanders access to insanely good TV," says Spark home, mobile and business chief executive, Chris Quin. "With the service launching today, we want to encourage Spark customers to be among the first to jump on board—and what better way to do that than to give them a great deal."
At this stage, Lightbox content can be viewed on a laptop, desktop or iPad (with the option of linking the device to a television for those with Apple TV box). Up to five devices can be connected to one Lightbox account, and different shows can be watched on two devices at the same time. At full price it costs $15 for 30 days of “all you can eat” TV shows.
A spokesman said Lightbox has focused its efforts on the most-used devices for this type of service for launch, but it is looking to expand the number of devices before the end of the year, with Android and Smart TV apps on the horizon.
Consortium, Spark's B2B agency, will be creating the campaign to promote Lightbox.
Freeview's Sam Irvine says the issue with most smart TV apps like MediaWorks, TVNZ or Quickflix is that you’ve got to go pretty deep into the menu to access the content and the experience is completely different across devices. Also, with the likes of Apple TV, Premier League Pass and now Lightbox, there are often problems with quality and connectivity when users need to get content from a mobile device to their main TV screen. And that's why he says the idea of an easy-to-use catch-up hub on the main TV that offers search functionality across all content and a backwards electronic programme guide is pretty compelling for "broadcasters, manufacturers, viewers and retailers".
As for Lightbox, he said: “We’ve seen it before. It’s always about the value proposition. What am I paying money for? Is the content worth the monthly [$15] sub and the hassle factor of me having to do something else to get it onto the big screen? Over the top players mean you have to go somewhere else."
Irvine says it has just done a round of research and found that people have been considering their entertainment options more than they were before and that's "probably because there are now more ondemand options". That's particularly noticeable with the under 35 market, many of whom don’t see a reason to pay for Sky as they’re accessing content through other means, either legally or illegally (according to Stuff, around 30,000 New Zealanders have found workarounds to use Netflix). So it is becoming more viable for some to use Freeview as a main provider of content with the addition of a paid-for over-the-top offering—as long as you're not keen on watching sport or certain HBO shows, which Sky has locked down.
"I think that’s an interesting development for Freeview. They have to take account of the fact that free is very powerful word. It’s a really interesting time for TV."
So could Lightbox, or Sky's soon-to-launch service, exist on Freeview? In the UK, Irvine says Sky developed an over the top offering called SkyGo that fits quite well with the established free-to-air platform, which can be bought by the day by non-subscribers. So it's not outside the realms of possibility.
Perhaps proving the rule that it pays to be third, Quickflix, New Zealand's self-proclaimed "premiere [sic] streaming service", has struggled to make in-roads into the New Zealand market and has been dealing with an attempted board coup in recent months. It offers movies and TV shows, although most of them are older (in Australia Quickflix has rights to some HBO shows, but Sky has that sewn up over here). But in a release it welcomed the arrival of its newest competitor Lightbox, while also pointing out its limitations in terms of devices.
“We are firm believers that competition is a good thing," says Paddy Buckley, Quickflix NZ managing director. "Quickflix has a very competitive offering and New Zealand’s largest telco entering the market shows that demand for streaming services is only increasing. The marketing that Spark will commit to its service will help grow awareness of the category as a whole, which in turn will drive demand for all streaming services. Since launching more than two years ago, Quickflix has streamed more than two and a half million movies and TV shows to Kiwis. It is the only service in New Zealand offering both movies and TV series, and has the flexibility of subscription and pay-per-view options. We look forward to the coming months as we continue to innovate, add more great content and deliver the best streaming service possible for Kiwis.”
There may be plenty of ways to watch Quicklfix, but if the content isn't up to snuff, it's academic. The abject failure that was TiVo was a prime example of this. And, at the other end of the equation, Sky continues to profit (a 21 percent increase in profit to $166 million just announced for the 12 months to June 2014) by supplying a great range of content and making it easy to access, even if some of its competitors feel the cards have been stacked in their favour.
Fellet said back in May that there has never been more competition, whether from MyFreeview, free-to-air channels bidding for shows that would traditionally screen on pay-TV, new free-to-air channels like Sommet Sports and Choice TV, content offers from the big global tech companies or local over-the-top options. And that, he says, means there is more pressure on Sky to speed up its innovation to stay relevant.
“There are only two articles that ever appear in the newspaper: Sky is a monopoly and should be heavily regulated and Sky is yesterday’s technology and won’t be around a year from now,” says Fellet. “I think both are overstated and the truth lies somewhere in the middle.”
It’s clear that Fellet and the team don’t believe the company gets its due when it comes to innovation, and as director of corporate comms Kirsty Way pointed out, it is already New Zealand's biggest live streaming service and it recently added a number of new channels to its SkyGo offering (up to 15 live streamed channels depending on the subscription). As he said in last year’s chief executive’s letter, “Sky is disruptive technology” and, over the years, he points to a number of successful innovations, many of which required massive capital investment.
“We did a UHF box in 1990. We launched our satellite box in 1997. Four or five years later, we launched MySky. Two or three years after that was MySky HD. You also have to upgrade the TV stations and develop new boxes and new technology like SkyGo. BskyB has 20 million subscribers to spread that out. We only have 870,000.”
Marketing director Mike Watson says one of the reasons TV has been so successful over the last 50 years is that “I turn it on and it always works. It’s easy.” It’s still early days in streaming’s evolution, and while he thinks there will be a few more over-the-top players arriving on the scene, they need to heed his advice: “Just make it friggin’ easy for me.” Premier League Pass, which launched last year, was given plenty of grief due to quality issues and while it's confirmed to the NBR it put in unsuccessful bids for the 2015 Rugby World Cup and F1 and said it should make a profit on its New Zealand operation, the technology still doesn't seem to be reliable enough just yet.
Fellet said those who do stream a lot of content often forget they are still a tiny minority, something backed up by its recent results that prove most mainstream New Zealanders are still pretty happy with their MySky recorders and don't feel the need to change just yet. Even in San Jose and Silicon Valley, the very heart of the internet, he says 94 percent of all TV watched is on linear channels and in the UK, director of programming - movies, factual and general entertainment Travis Dunbar says the iPlayer accounts for less than half of one percent of total TV viewing.
“Streaming has a huge high profile and to expand our subscriber base, especially with the younger ones, we’ve got to be there,” says Fellet. “But subscribers are confused with how many options there are. We want to be the trusted entertainment brand and we want them to lean towards Sky.”
Its SVOD offering will be available to non-Sky customers offering a selection of both television series and movie content and it will continue to partner with Vodafone, which will bundle the service with its broadband.