Mark Scott, the Managing Director of the ABC, said something very interesting yesterday at CEDA’s launch of its new collection of paper’s on broadband. He noted that recently, while iinet customers represented about 5 percent of visitors to ABC Online (the ABC’s standard website), they represented 31 percent of users of its iView site that streams video on demand of ABC television.
That is an extraordinary difference but no big mystery. iinet offer a “Media Lounge” to its customers that gives them access to ABC’s iView outside of download limits. Not only that, iTunes Music Store downloads, various radio and sport options and X-box live are all unmetered. Think about what that means? If you watch say 10 TV shows and download 2 movies a month (around 6GB), then you can save yourself $10-$20 a month on iinet with a lower metered cap than other ISPs. Add to that the saving of metering anxiety as you visit those sites and the savings are compelling.
This simple tale has so many implications for the broadband debate in Australia it isn’t funny. First, Australians are big downloaders of illegal TV and movies. iinet’s plans effectively pay people not to download illegally by offering them effective lower internet access charges for doing things legitmately. Ironically, it is iinet who is being singled out by copyright holders accusing them of facilitating illegal downloads.
Second, iinet’s strategy creates a new form of competitive pressure for the largest ISP, BigPond, who have their own unmetered content which is restricted to Windows and, let’s face it, sites that have been far less popular in the market-place.
Third, the ABC site is geared towards streaming and I am told that this is more popular than downloading content and watching them in a buffered mode. As Andrew Odlyzko has recently reminded us, streaming offers very little advantage in consumer experience over downloading but at great cost. This suggests that one implication of higher speed broadband may be to reduce the efficiency by which users consumer high-bandwidth content.
But, finally, when it comes to ABC content, isn’t it extraordinary that despite taxpayers paying for that content, licenses and ABC’s development and web-hosting costs, they have to pay again because for all other ISPs, ABC content is metered? Nowhere in the Government’s discussion of what it is looking for in the National Broadband Tender is there a suggestion that it would be important the government sites and their content be unmetered. When these details become public, it will be interesting to see if any tender has even proposed this. So we may have the amazing situation that we will have a shiny, part-government owned, broadband network who charges its own citizens whenever they want to watch Parliament Question Time online. Hey, I have watched that Question Time recently and I haven’t even seen this been put as a question yet.
This post appeared in Crikey, 4th December 2008.