This morning, yet another bombshell hit the SVOD space with the announcement that Slingshot had introduced its global mode, which will give Kiwi subscribers access to services such as Netflix, Hulu, Amazon Prime, BBC iPlayer.
This announcement comes only a week after Telecom launched its SVOD service called Lightbox and two weeks after Sky sent out a release saying that it was planning to launch a similar service in the near future.
Global Mode masks the IP addresses of Slingshot users to make it seem like it's coming from the UK or US, which means they can access geolocked content.
The main area of contention surrounding Slingshot's move is that it effectively gives Kiwis subscribers backdoor access to foreign-based programmes. So while the likes of Sky, Lightbox and Quickflix have to pay for regional SVOD broadcasting rights to host the programmes, Slingshot has not entered into any comparable agreements with content owners.
In September last year, when Slingshot first announced its plans to introduce global mode, AJ Park partner and IP law specialist Matt Adams told StopPress that this move could see the internet service provider in the line of fire from major copyright holders in the US and UK.
Despite stepping on the toes of copyright holders, Slingshot general manager Taryn Hamilton says that the service could potentially reduce the extent of illegal downloads in New Zealand.
“We know that people would prefer to pay a reasonable price for the content they want to watch rather than pirating it," he says. "It’s time the content providers and rights holders got their act together and offered Kiwis the same content – for the same price – that people in other parts of the world have access to. Until they do, people will need to use a service like Global Mode to pay for top-quality online content, or continue to steal it."
Hamilton also says that he thinks it unlikely that any international copyright holders would take legal action against Slingshot.
"It would be a terrible look for these companies to take action as they would be punishing New Zealanders that legitimately want to pay to consume their service. The alternative in many cases at the moment is to steal it, which is the worst case scenario for all involved. What would their message be? That they don’t want Kiwis to consume content at a fair price? That they want to be able to charge significantly more than they charge others around the world? Or is it that they’re just not bothered to accommodate our small island in the South Pacific?"
As things stand at the moment, Slingshot finds itself in a grey legal area in that while New Zealand's Copyright Act of 1994 prohibits circumventing technical protection measures (TPM) placed on a piece of copyrighted content, it does not count processes stopping the playback of content in New Zealand as a TPM.
And although Hamilton is correct in saying that Slingshot "is not circumventing any Acts", the law is subject to change.
Adams believes that the legal uncertainty involving the SVOD space could well be clarified later this year the in courtroom, as one of the interested parties—most likely Netflix, iTunes or content creators—litigate against Slingshot.
Earlier today, Sky's chief executive John Fellet told the Herald that he did not think companies such as Netflix would welcome this move, given that they are negotiating rights to set up shop on both sides of the ditch.
"I don't think they would be keen on paying for New Zealand rights only to see them undermined by people accessing the US," he was quoted as saying in the article.
But given that Netflix stands to make additional subscription fees from New Zealanders without having to purchase the regional rights to operate in the country, it is unlikely that the SVOD provider is going to be averse to Slingshot's new policy.
Slingshot has not yet launched a nationwide ad campaign for global mode, but it is currently running in-flight promotional material to let expats know that they can still access international content while staying in New Zealand.
In addition to this flight-based campaign, the internet service provider has also launched a Kiwi-targeted campaign that marks a significant change in direction from its previous advertising efforts.
"We just felt we needed to freshen up our look and feel somewhat but the most important aspect of it is that we wanted to get the message out there that Slingshot delivers great service," says Hamilton. "Slingshot has the best customer sat scores out of any of the big ISPs in New Zealand, but this is not recognised enough among the general population. People have long memories and Slingshot did go through a period years ago where we under-invested in service in order to lead on price. We’re in a position now where the business is well equipped to do both ... [and] we thought using images of our customers (and staff) was a nice way to communicate this message and the creative execution is modern and relevant."
The introduction of global mode comes at a busy time for Slingshot, in the sense that the internet service provider was recently involved in a takeover. On 20 June, following several months of speculation, Callplus—the parent company of Slingshot—announced that it had bought Orcon.
Despite the the change of ownership, Hamilton says that the advertising account holders have not been changed.
"Slingshot advertising is managed by Mr Smith. Media by MBM. We have no plans at this stage to consolidate any Orcon accounts. They are continuing to run as a standalone business."
Orcon's most recent campaigns have been executed by Contagion.