Telco giant Telstra will sell its T-Box digital video recorder cheaper than expected in order to compete directly with rivals including Foxtel’s iQ, with Telstra admitting it doesn’t even expect to make a profit from the device.
Instead, the company will push content distribution as the main cash generator, with deals already signed with entertainment groups including Walt Disney and Warner Brothers to sell films through the device.
Users will also be able to browse free-to-air channels using the device, access YouTube, seven BigPond TV Channels and can purchase films for rent via an online distribution service.
The box will be available to Telstra customers at $299 from mid-June, placing it in the market alongside the TiVo, Foxtel iQ and Austar MyStar digital video offerings. It also comes as iiNet plans to offer a similar type of technology to customers.
The T-Box will also be up against the Google TV offering, but it is not expected that product will be released into the Australian market until at least early next year.
The gadget has been used on a test basis in 250 homes since last November, but Telstra media division head Christ Taylor told the AFR the box isn’t intended as the main source of revenue.
“We’ve set a very competitive price for T-Box,” he said. “The idea is not to make hay off the device, it is to add value to our broadband offer. I wouldn’t describe the T-Box recorder as a loss leader, but we’re not expecting to make profits from sales of the box itself.”
Telstra chief executive David Thodey has previously praised the device by saying internet connectivity will change the TV experience in the same way cable television did when it was first introduced.
Taylor also said the company will increase its movie rental service to include 2,000 titles by the end of the year, with more channels to be added to the T-Box service as well.
The introduction of the device comes as the personal video recorder market is heating up. Foxtel has pushed its iQ device as a must-have on many of its packaged deals, with Google even coming into the market with its Google TV software.
ISP iiNet is also set to take on Telstra by offering its own DVR product by partnering with FetchTV. The service will include 20 channels and on-demand services when it launches later this month.
Analysts have pointed out that Apple entered the market some time ago with its Apple TV device, but take-up has been lower than expected. Instead, users are going for more sophisticated, powerful devices.
Foxtel chief executive Kim Williams also said the company and Telstra could work together on sharing content, but no discussions had taken place.
The T-Box features 200GB of storage for downloads, the ability to connect to the internet via Wi-Fi, a USB port for sharing storage and an HDMI port.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
