Video streaming: nbn will fuel the revolution

The nbn™ network is enabling the online video streaming revolution in Australia as we move from broadcast to broadband TV consumption but this industry shift brings challenges as well as opportunities.

When nbn was founded back in April 2009, Netflix had launched its online video streaming service relatively recently in the US, and was still heavily reliant on sending DVDs out in the mail – back then the online streaming industry was barely out of short pants, but these days things are very different.

Research from UK-based firm Ovum tells us that there are now an astonishing 270 million subscribers around the world paying for online video – with this number forecast to rise to 560 million subscribers in 2022, generating extraordinary annual revenues of US$60 billion.

Right here in Australia, Ovum is forecasting that we will have nearly seven million online video subscribers by 2022, generating annual revenues of US$800 million – those are pretty amazing numbers when you think that Netflix only launched here in March 2015.

The nbn™ network: Delivering the goods on streaming  

So, while the video streaming market has grown extraordinarily quickly, the good news for Australians is that the nbn™ network is now ramping up its rollout. In a couple of months’ time more than half the country will be able to watch streaming video with access to a service powered by the nbn™ network.

If we are going to move from a broadcast TV market to a broadband TV market then it is crucial that all Aussies have access to fast broadband and the nbn™ network facilitates that.

Our RSPs are continually modifying their retail plans to include more and more data – there are even unlimited data plans for as low as $60 per month – meaning that Aussies should be able to stream away to their hearts' content.

You may not be able to say the same thing about some mobile networks where we are seeing some operators advertise ever faster speeds, but still keeping a tight cap on how much data can be consumed – even on a more generous 10GB plan, far higher than the average being purchased, an end user could not watch very much streaming video before they have to start worrying about bill shock!

A complicated chain

As more and more people consume their content online it becomes ever more evident that a paradigm shift is taking place in the TV industry. People are moving away from consuming managed broadcast content and going online where delivery is totally different.

If I am a Foxtel cable or satellite TV subscriber and my service is playing up then I phone Foxtel and they have to fix it up for me; they are the sole point of responsibility.

However, if we are in the online video era, who do I approach if problems occur? Do I call Netflix or Stan? My RSP? nbn? Maybe I should call my hardware provider. The problem could even be with my modem or TV set for all I know.

Importantly, while online video is a fantastic new industry, there are going to be significant challenges too and helping people to understand how the system works from end to end is really vital.

Without getting too techy, there is a reason why YouTube plays instantly on your phone or tablet – it’s because Google has invested tens of millions of dollars on a Content Delivery Network that ensures it does – it doesn’t happen by accident!

An opportunity ahead  

When Netflix launched in March 2015, the average end user connected to services over the nbn™ network was consuming only 70GB/month – this month we expect that average consumption to top 148GB/month and it just keeps growing.

What’s more, we see that the online video market is only just getting started. Just look at the example of Optus winning the EPL rights and now delivering live games over their fixed and mobile broadband networks all over the country.

We expect to see more of the same as we move forward, with more live sports going online because of the ease with which RSPs can sell this content to anybody. You don’t need an engineer to visit your house and hook-up a set-top box; you can just download an app and you are away – amazing, really.

Sarah Palmer is Executive General Manager for Product & Pricing at nbn.