It may be some years before Quickflix sees any success with its latest foray into video streaming, experts say, with many consumers still unable to access high definition video content without breaching their download quotas.
The warning comes as Quickflix announced the move just this week, saying that users would be able to access video on demand through Sony products, and on PCs and Apple computers from next month. It’s been a long time coming for the service, which has been pushing its DVD-by-mail rental option for years.
And while Quickflix says the move comes at an opportune time, with the National Broadband Network expected to increase users’ capability to download such services, others suggest it may be some time before any payoff is seen.
Telsyte director of research consulting Chris Coughlan says it’s important to point out that while the service is marketed as “streaming”, the reality of the situation isn’t as smooth.
“This is video on demand, not streaming. So the user has to load a sufficient amount of the film before that can be strained based on the download speed and the quality of the internet connection,” he says.
“Now, there’s no reason to think you can’t offer that service, but it does rely on a few things, and one of those is having really high quotas.”
Currently internet service providers in Australia attach a price to bandwidth, as opposed to services in the United States where unlimited plans are common, allowing for the entry of online video players such as Netflix.
However, while download quotas are increasing, many users still have low caps and won’t be able to download several films a month, especially at a higher quality. Coughlan says this can be a “fundamental” issue for a lot of users.
“Going into the NBN, it’s going to be very difficult to provide unmetered content because the ISPs are going to be paying extra charges. Now, there are exceptions to this, but having to pay CVC charges means there will always be that connection.”
The market is ripe for a streaming product. Traditional rental stores such as Blockbuster and Video Ezy have been suffering, and the market has seen a large take up of other streaming services such as FetchTV and Telstra’s own BigPond services.
Telco experts say the NBN will allow for users to download large files such as streamed films easily, but as Coughlan points out, there will always be a cap on data.
However, Quickflix founder and executive chairman Stephen Langsford says the time is right.
“The average connection across our users is 1.5 megabits per second. Our view is that folks in cities will be able to connect and enjoy, and that will only improve as the NBN is rolled out.
Coughlan says moving into the video on demand market makes sense and says it’s a “logical progression” for the company – it just won’t pay off straight away.
“Video rental sales are going down rapidly. They need to move into this space, and the sooner they do it will create a solid core for them going forward.”
“Moving into this now is not a bad thing. It will build up experience in advance of the NBN, and if they can create relationships with ISPs, they will do very well.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
