Product differentiation by ignorance

Telstra’s Bigpond ISP launched its movie and TV download service yesterday. This is an interesting move given Telstra’s stake in Foxtel as it appears to provide a competing service.

According to today’s Australian Financial Review, the download service will be distinct from the cable TV service. Why? Well read this:

Families that insist on using their TVs to watch TV shows and movies would be able to do so -but only “if they can work out the black wire and the yellow wire and the red wire” to connect it to their PC, Telstra BigPond group managing director Justin Milne said.

Yes, go ahead and read that again, it did say what you thought it said. Only consumers with ‘wire colour knowledge’ will be able to freely substitute between content sources and watch that content on their TVs. Others who download will be confined to their PC. So no worries, no competition. After all, how many people have ‘wire content knowledge’?

Obviously, the more relevant question is how many people who have ‘work out Bigpond’s download service’ do not have ‘wire colour knowledge’? Remember ‘wire colour knowledge’ is roughly equivalent to ‘connect VCR to TV knowledge’ and my guess is those with the ‘CD tray is not a cup holder’ knowledge are ‘wire equipped.’ So basically most downloaders will have a nice free choice. Talk about “delusions of differentiation”!

Actually, I have a Mac Mini hooked up to our TV. I haven’t checked it out yet but there is a pretty good chance that the Bigpond digital rights management won’t work there. In that case, Telstra will have managed to exclude ‘sensible enough to use a Mac’ households from their service. But is that differentiation or indifference?