The digital content distribution market in Australia is hopefully about to become a lot more interesting. According to a report by Asher Moses in Fairfax Newspapers, the US online catch-up TV service Hulu is preparing to launch in Australia with or without the support of Seven, Nine and Ten. This is good news for content owners as it will provide another online access point to legally distributed content, thereby reducing digital piracy rates.
Recent research from Sphere Analysis found that 4.7 million Australians accessed online content illegally in 2010 and this cost Australian content industries (such as the music and film industries) AUD$900 million. Furthermore a report commissioned by NBC Universal found that 23.76% of Internet bandwidth is infringing traffic. Digital Piracy is a real problem in Australia hence the legal action brought by 34 films studios and the Seven Network against ISP iiNet for copyright infringement by its users, for the downloading of unlicensed content. The Federal Court and Full Federal Court held that iiNet had not authorised copyright infringement, however the Applicants have appealed the decision of the Full Court to the High Court of Australia. We await the outcome of the appeal.
We also await for an Internet Industry Code to be implemented to regulate how ISPs must respond to copyright infringement notices from content owners. These notices allege copyright infringement by an Internet user and demand the ISP to cancel or suspend their user’s service due to the infringement or otherwise the ISP will face secondary liability.
Whilst we wait for both of the above the launch of new and innovative services such as Hulu should in the interim assist in providing easier access to the latest media content and contribute to Internet users accessing licensed content rather than downloading or streaming unlicensed content.
Hulu, a advertiser-funded and premium subscription based Internet service has been very successful in the US. The online service is owned US media companies NBC Universal, News Corporation and The Walt Disney Company and has around 260 partners providing content. Major shows available for viewing include The Simpsons, Modern Family and classics such as Buffy the Vampire Slayer.
The basic advertiser supported Hulu service is free and allows its users to stream their favour television shows an unlimited number of times. The subscription based premium Hulu Plus goes a step further. According to Hulu’s website this service carries some commercials and is accessed via a monthly fee of US$7.99 that provides subscribers access to current and back seasons of popular shows from major US networks. The major plus of this service is that it is not only available from a PC but across a whole range of devices including smart TVs, gaming console, mobile phones and table devices.
The success of Hulu in the US should be music to the ears of Australia’s commercial TV networks. However the Age reports that whilst Nine has signed a heads of agreement with the US operation, Seven have dismissed the idea of having a one stop shop for catch-up television. This is the wrong attitude. In order to combat piracy there must be a cooperative approach from copyright owners and content distributors. Australian media executives should join the Hulu bandwagon when and if it launches in Australia.
Whilst the free-to-air networks have banded together under the Freeview umbrella to push the digital TV message ahead of the analogue switch-off in 2013, each network has gone their separate way with on-demand IPTV offerings. Seven has content accessible through TIVO’s CASPA on-demand service or through Plus7 which is available at Yahoo!7 or on a Playstation 3. Meanwhile, Channel Nine’s on-demand service is FixPlay on Ninemsn. Network Ten’s website also features an on-demand service. The ABC’s iView on-demand service is also available online or through Playstation 3. The variety of catch-up services no doubt causes fragmentation in the marketplace as the technology or system used differs for each service, meaning cross-platform distribution has not really eventuated unlike cross-platform access for services such as Hulu or Netflix. The measurable success of the cooperative Freeview is that two years out from the analogue switch off there are now 89% of Australian households with digital television, up a massive 29% year on year. Cooperation it would appear is the right approach to bring change.
Hulu is the perfect vehicle for the commercial stations to complement existing online catch-up services and drive users away from unlicensed content. The Hulu service views its main competition as illegal streaming websites and reports show that they have had some success in reducing digital piracy rates. For example in May 2010 Hulu recorded 1.2 billion video streams and by the end of 2011 they expect to have more than a million users generating some US$200 million in revenue. The Australian networks could share in this revenue if they jump on board for any Australian venture.
Hulu filed for trade mark registration with IP Australia on March 29 (application # 1416895). A search of the ATMOSS database shows that Hulu has applied to have its corporate logo registered in Classes 9, 38, 41 and 42. They have sought trade mark protection for “downloadable audio-visual media content”, “broadcasting and streaming of audio-visual media content” and “hosting of digital content on the internet”.
The Hulu brand is strong (as evidenced by its early application for trade mark protection) and as Kim Dalton, the ABC’s director of television said the ABC supports the idea of a “whole industry platform offering” as it would “underpin and bring strength to the free-to-air platform.” We have already seen in the UK the impending launch of cooperative catch-up service YouView (read more here from an earlier FrostGlobal article), which has the backing of the BBC, ITV, Channel Four and Channel Five (the UK’s free-to-air networks).
The US has Hulu and the UK will soon to have an operational YouView. To combat the massive negatives effects of piracy, which cost a reported 8,000 Australian jobs in 2010, the step of making more content available online more conveniently must be taken. Hulu has been a roaring success in the US, as the statistics indicate, and an impending launch in Australia should be embraced by the Australian TV networks. The service will provide a new means to access content legitimately online and also create new revenue streams for traditional media companies in the digital space.
Kim Williams AM, the CEO FOXTEL said at the Future of the Media Forum “most of our public policy settings are firmly back in the age of Menzies in relation to media…people say to me I’m obsessed with piracy and I say I’m not obsessed with piracy, I’m obsessed with having the rule of law work in the 21st century.” Piracy is a key concern for media companies and until the Australia Government modernises its anti-digital piracy laws in conjunction with the development of an Internet industry a code of conduct, copyright owners must combat piracy by developing new ways online to consume content. Consumers are ready to consume media in new ways as a recent report showed 34% of those watching TV, also watched TV on additional screens such as PCs and iPhones.
We must wait and see if reports of Hulu’s impending launch in Australia are correct, but hopefully it launches soon and the commercial networks are early partners of the service, because new distribution methods are a key piece of the puzzle in combating digital piracy.
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