Paddy Buckley is the Managing Director of Quickflix, the challenger in the online television content delivery game.
The rise of video on demand (VOD) is exciting for consumers. Coliseum's high-profile
acquisition of the English Premier League football rights has brought into focus the rapid worldwide transition from linear (scheduled) broadcasting to VOD.
A few things are increasingly clear: we have less free time for aimless channel hopping.
We want to binge-watch TV two or three episodes at a time. TV ads now feel like bizarre intrusions into our viewing time. These changes have shown up first in the US, where the VOD leader Netflix generates 30-40% of all peak-time internet traffic.
Closer to home, technology is improving and the ultra-fast broadband fibre rollout is underway. UFB isn't exactly needed for VOD to work, but it will seriously improve the experience - content will be delivered fast, in high definition, across multiple devices at the same time, and it will be ubiquitous. Well, nearly. The rural broadband initiative will hopefully be enough to satisfy those that generate most of our national wealth.
All good? Moving boldly towards an exciting new world of convenient on demand viewing, on the device of your choice, wherever you are? Actually there's a problem.
Let’s leave access to content to one side - at least until the Commerce Commission reports back on its current investigation - the problem is wider and more fundamental.
Before we launched Quickflix last year, I spent a lot of time trying to make sense of the contradictions in the legislation that would apply to us: the telecoms sector is regulated, but broadcasting is not. It wasn't clear to me precisely where VOD fitted in. Fast forward to today and I'm none the wiser. This uncertainty is leading to some strange things going on out there.
It turns out that on demand viewing is not covered by the Broadcasting Act because it's not a broadcast to the public at large - each stream is to a single viewer or household. This puts the broadcasters in a tricky spot with their ‘catch-up’ services which are technically VOD (and therefore not broadcasting) but which they are forced to treat like broadcasting in the absence of more suitable legislation. There's a similar story for online DVD retailers - they no doubt want to comply with the legislation but how can they when it can't easily be applied to them? The legislation we're talking about was
drafted in the 1980s and 90s so it's hardly surprising that it doesn't envisage
VOD and other online services.
Technology and the development of these new services always move faster than regulation, so I’m certainly not finger-pointing. Nevertheless, our broadcasting and
telecoms legislation is contradictory, outdated, and gives the lie to any claim
that our public policy is keeping pace with the convergence of digital delivery
systems and content. The whole thing needs a review.
In February, Amy Adams announced one: a review of the policy framework for regulating telecommunications services. According to Ms Adams "regulatory certainty is an important factor in the ability of New Zealanders to have early access to high-quality communication services based on new technologies".
The Minister will announce the terms of reference and timetable soon. Let’s hope they deal with some public policy questions right from the start.
Can we agree on the technology neutrality of delivery systems and that content is still
content whether viewers get it by digital terrestrial, satellite or over IP? Can we agree a coherent approach that takes in telecoms and broadcasting? And can we agree that convergence has already happened and now needs to be reflected in legislation?
InternetNZ’s well-considered discussion paper on convergence is here and asks
all the right questions. Those committed to the success of the telecoms and broadcasting sectors, and the taxpayers' $1.3 billion UFB investment, should respond to it as well as to the Minister’s review.
Here's another example of Alice in Wonderland that illustrates the need to think deep. Quickflix will launch a channel on the Freeview platform later this year. We're very excited about it and it'll mean that a viewer can be watching a free-to-air broadcaster and then change to channel 200 to watch Quickflix's VOD.
That'll be a great experience for the viewer but the unforeseen consequence is that there will be different legislative regimes governing different ends of the EPG - broadcasting for the traditional channels and then, well, "not broadcasting" for the VOD channels. In other words, a quick change of channel is all it will take to change regimes - surely not the "regulatory certainty" that we are striving for.
Copper pricing shouldn’t be the only priority issue for Amy Adams. Convergence of digital ntworks and digital content has already occurred. She has the chance
to save the Government from the embarrassment of outdated and contradictory
public policy. And the parliamentary draftsman can be relieved of the task of nit-picking to take account of a future that everyone else has noticed is already here.
Over to you, Minister.