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Sky Hits Pause Button on Online Video: Internet Overcharging Schemes Kill Sky Online Video in New Zealand

Phillip Dampier July 2, 2009 Data Caps 4 Comments

Netflix, Apple, and Amazon — are you paying attention? This is your future, as your business plans go up in flames should Internet Overcharging schemes get a foothold in the United States.

Sky Television is New Zealand this week announced it was throwing in the towel on Sky Online, its broadband video on demand service for New Zealand.  It’s not that the service wasn’t popular and keenly sought by broadband customers in the country.

John Fellet, Sky New Zealand

John Fellet, Sky New Zealand

Chief Executive John Fellet said the fault was entirely with broadband providers who annoyed customers with broadband usage caps.  In the end, “the service does not make sense in the current New Zealand broadband market.”

Subscribers got unlimited access to Sky Online for $5 a month, but they quickly learned the $5 charge was just the beginning.  Once customers consumed their paltry usage allowance, their speeds were dropped to dial-up for the rest of the month.

“It has not been a great viewer experience,” Fellet told The New Zealand Herald.

Fellet told the newspaper he thought these kinds of usage limits detracted from one of the primary selling points for broadband service in the first place — video content.

Fellet has fielded several customer complaint calls daily about the situation, something he considers the tip of the iceberg.

Until Sky can secure an arrangement to exempt usage caps from their video service, an unlikely proposition, the entire service will be put on hold.

The Herald provides an update on what other services are facing in the south Pacific:

Sky – which has invested heavily in online rights to its programmes – has not been alone in looking to open up the market.

Hybrid Television Services holds Australasian rights to TiVo, which has download capabilities and wants to offer an internet download service. Hybrid, one-third owned by TVNZ, has been talking to Kiwi telcos.

Sky launched its On Demand service this time last year, about 15 months after TVNZ had launched TVNZ ondemand.

Sky has been unable to make it work under a pay TV model. But TVNZ head of emerging markets Jason Paris says that TVNZ ondemand – funded through advertising attachments to programme downloads – has been profitable since March.

Unlike Sky, Paris insisted yesterday that TVNZ had received no complaints from viewers about breaching data caps.

TVNZ was the first broadcaster in Australasia to launch a full online catch-up service and nearly all of of its prime-time shows are available through this service. Each week nearly 250,000 New Zealanders stream 1.5 million shows to their homes, Paris says.

Some TVNZ traffic has been through a relationship with the state-owned ISP Orcon, which has allowed its subscribers to access the TVNZ ondemand website without affecting data caps.

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Uncle Ken
Uncle Ken
11 years ago

Hmmm I think I posted that a couple of days ago. The entire system is going to come crashing down.

11 years ago

The people need to step up and demand their government leaders do their job by policing the endless greed of these large ISP corporations. Unfortunately…that’s not practical.

Michael Chaney
11 years ago
Reply to  Merlin

You can start by asking your Congressman to co-sponsor H.R.2902 and explain to him or her why caps are so bad. I, along with members of the Austin Broadband Interest Group, met with Rep. Doggett’s office on July 1 to do just that. And they were very receptive to our cause, and had done the research prior to our meeting to understand H.R.2902.

I can’t stress enough that every single one of you has the power to educate your elected officials. I think you’ll be surprised just how easy it is to be heard.

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