Media: Sky fires salvo on TV front

Special Group, which handles Max Fashions, is looking to gain bigger clients.

SKY Television and TiVo are negotiating special deals with internet service providers that would encourage a new wave of internet protocol TV.

If one starts IPTV services the other will surely follow. But the two operators have very different ideas about when it will become viable.

IPTV - allowing people to easily download movies and programmes from the internet directly on to TV sets - is part of an ongoing war between pay TV and free-to-air TV.

In this case free-to-air is represented by TiVo.

Both need special cheap deals so that consumers can download large amounts of content from the internet avoiding high costs and data-caps. What are the chances of such a deal?

TiVo Australasian licence holders Hybrid Television Services, co-owned by TVNZ and the Australian Seven Network, is more confident than Sky.

Hybrid chief executive Robbee Minicola said that TiVo in Australia had secured deals with ISPs.

Some revenue for TiVo is expected to come from pay-per-view premium content.

But much of it is expected to be from advertising - presumably negotiated by TVNZ and Seven - that is attached to free programme downloads.

Minicola said that Hybrid discussions with New Zealand ISPs were focused on the notion that one party takes a share of the other's revenue.

The value for ISPs under that scenario would presumably be that it was an incentive for the ISPs to attract customers. Typically a movie might use 1GB of space.

Presumably a major challenge will be convincing ISPs that the cost of extra broadband capacity to cover free downloads can be recovered from increased market share.

Sky sceptical

Sky Television chief executive John Fellet said he saw no solution to the data cap issue in the next two to three years.

And he said he doubted any telco could offer a data cap deal to one party and not to another.

"The new broadband network the Government plans will make inroads that could help," he said.

In the meantime it created an issue for other broadband users. "If it [IPTV] took off that would destroy [the telcos'] capacity," he said

Telecom director of Home and Broadband Ralph Brayham said the economics behind IPTV were challenging.

"Most people will want to watch internet TV during the evening, which is also the time that most people use the internet for general surfing, entertainment and email.

"Due to the way bandwidth capacity is built, this drives significant usage and therefore cost into the base product [and] as such it's not something providers can give away."

A relatively small ISP, state-owned Orcon, has started a scheme where its customers can access sites such as tvnzondemand and download material without eating into their data allocations.

But the key issue will be scale and if IPTV does takes off.

Content is king

Apart from bandwidth, the other issue facing any downloads is content. Behind the scenes there will be tussles over who has the right to provide what in download TV. TVNZ and Seven are two of the biggest customers for international distributors. But Minicola points out that all digital rights are not created equal and while Seven and TVNZ hold a lot of copyright, it cannot be assumed that it can be used by TiVo. Meanwhile, Sky has also been active in securing digital rights for much of the programming it secures for pay TV.

Specialty bread

Creative Advertising agency Special Group has built its name on pigs, fashion and the Greens - working with animal welfare group SAFE, which came to the fore with the recent expose on some pig farming conditions. Special has had international acclaim with Max Fashions and latterly with the Greens' Mt Albert campaign.

Now the agency has sights on bigger corporate clients. Special Group this week recruited veteran account director Michael Redwood to join the agency. Redwood brings experience working on Telecom and Westpac Bank at Saatchi & Saatchi and previously worked on Fonterra and oversaw Air New Zealand at Colenso BBDO. The move makes sense for both parties - adding to the corporate smarts at Special and it will give Redwood some equity and a new focus.

Anchors away

Wendy Petrie's over-excited fist pumping when she successfully conducted a live item in the run-up to the Bain trial outcome was apparently because TVNZ had beaten TV3, rather than pride in conducting a live item. TVNZ had faced technical problems, as it had in the Molenaar case, and as it had during the Air New Zealand crash in Perpignan, France. But the pumping did nothing for the tradition of sending news presentation staff to news events so they can be marketed as real journalists.

TV3's Mike McRoberts has put on the best show, turning up in Afghanistan in an image that will grace the back of buses promotions for months. Hilary Barry knows her way around a newsroom but looked like a fish out of water in her wet weather gear reporting the Ohakune lahar. Simon Dallow was surplus to requirements covering the Molenaar shooting from behind cordons to keep away fans. Meanwhile, Samantha Hayes donned a frilly pink dress to report from the devilish heat in India. TVNZ might have found it was better to focus on the nuts and bolts and leave anchors in the studio, where they are less likely to be carried away.

Back to the future

Hollywood film and record industries may get their way and force internet Services Providers to police copyright. Telcos, ISPs and internet freedom groups were relieved back in March when the Government scrapped the hastily worded Section 92A provisions of the Copyright Act.

The provision, which was passionately opposed, obligated ISPs in many situations to intervene and remove internet access for customers downloading material in breach of copyright.

But there are signs that having won the battle, opponents are at risk of losing the war.

InternetNZ executive director Keith Davidson was concerned this week that a review of legislation by the Ministry of Economic Development was aimed at tidying up the wording for Section 92A rather than removing provisions for forced intervention. The Ministry has given just three weeks for submissions.

Will Hollywood copyright holders continue to take the hard line? Davidson said that copyright groups had an interest in forming better relationships with ISPs, as music was increasingly downloaded from the internet. It'll be surprising if the Hollywood bosses take that common sense approach.

Casual work

Many young people would be keen for a casual job in television, but at the state broadcaster, chances are better if you know somebody who works there.

TVNZ confirmed this week it usually uses "word of mouth" to employ its casual staff. The Business Herald asked about the process used by TVNZ to hire the son of Rick Ellis for an unadvertised "casual" position. After being introduced by his father, Sam Ellis was hired in November last year for the holidays, and in late January took up a casual role in digital media sales.

TVNZ spokeswoman Megan Richards said that such positions "are almost never advertised and universally picked up from people already in the organisation, or friends of friends".

Richards said that TVNZ is generally supportive of family members' employment, provided proper conflict-of-interest protocols are observed and appointment is on merit. "TVNZ has found no disadvantage to the company in employing family members, and some advantage in increased loyalty. As for the appointment of the chief executive's son, Richards said when he returned to university to complete his masters degree, in online television services, he became a casual in the digital media sales division, and was working about two days a week.

"At the time redundancies became a necessity for TVNZ, Sam was working in an area that was unaffected, and sales has been actively looking for casual staff, she said.

"Sam Ellis has received no special benefits or privileges apart from his initial introduction to the organisation through his father," Richards said.

He was regarded as a strong performer with the ability to offer something extra through his academic studies.

"Rick Ellis has taken no part in his placement, beyond an initial introduction, and remains at arm's length," said the TVNZ spokeswoman.