Entertainment In Phone Plans Is Coming

60 second overview

  • The way Australians watch TV has changed.
  • It is increasingly common for us to watch streamed internet media.
  • Streaming Video ( like YouTube, Stan or Netflix ) allows us to watch what we want to when we want to.
  • You can watch streaming video on your phone, when commuting or taking care of the kids on a long drive.
  • Phone companies like Optus and OVO are paying an increasing amount of focus to content as part of their service.
  • OVO in particular is unique and innovative.
  • The critical question in a customer’s mind is – can I watch this content for free on my phone.
  • The answer is, all to often, no. Users watching content who have a plan from Optus, Telstra, Vodafone etc.

Introducing Video / other Content On Mobile Phones

In this article we discuss the telco side of SVOD, where, through an agreement with your phone company, you get access to a streaming video service like Stan or Netflix.

Gone are the days when there were only three TV channels and conversations in the office, or on the playground, about what we watched last night. Media consumption has fragmented. Self service access to content, Streaming Video On Demand ( SVOD ) is here and the world has changed.

Watching what you want to, when you want to, is clearly the way of the future. Any family that has set off with kids in the car for a long journey knows the value of mobile entertainment and the ability to pick a show the audience loves.

In this article we are discussing the telco side of things. Where, through an agreement with your phone company, you get access to a streaming video service like Stan or Netflix.

Why The Phone Companies Are Focused On Content

It seems that the future of your mobile phone decisions might include, and perhaps even be led by, the content made available by the phone company you are considering.

Choosing a Streaming Video Service is complicated when it comes to deciding on a home option, let alone bringing your mobile in to the equation. But streaming video on your mobile phone is becoming more common. The phone companies are encouraging you to do it. With a huge array of phone companies and 3 networks to go with, mobile phone shoppers have more than enough choice. Vodafone, Optus and Telstra already offer unlimited voice and SMS ( to Australian numbers ) on each of their plans. ( With a small number of exception in Telstra’s range – that will probably soon disappear. ) Choosing between phone plans these days more and more frequently involves simply deciding how much data you want.

In a competitive market like this, telcos try and differentiate their product to avoid commoditization and a reduction in the price they can charge. Increasingly, they are using content to do that. There have been recent significant announcements from many of the phone companies relating to the content they have or want.

  • Optus:
    Optus recently claimed the rights to Premier League football in the UK and Australian Cricket.
  • Telstra:
    Initially Telstra are trying to sell Foxtel ( which itself has a mobile component ) and are betting big on ‘Presto’ – a streaming media provider like Stan or Netflix.
  • Vodafone:
    Vodafone has emulated some of it’s UK streaming media success. Vodafone let users signing up to contracts pick between streaming audio ( Spotify ) and video ( Stan ) on their plans. Plans with larger denominations receive either a 6 month or a 12 month subscription ‘free of charge.’
  • Virgin Mobile:
    Poor Virgin has very little going for it other than the content it provides. Amaysim offer better value and exactly the same network across the board. Virgin have trailed the pack when it comes to content inclusions by almost a full year. They announced a bizarre Presto offering ( as we’ve said, one of Presto’s investors is Telstra ) and a small data bundle size increase if you pick them.
  • OVO:
    Perhaps most interestingly, there are also some new phone companies stimulating innovation in the field. For OVO, an Optus MVNO Streaming Content ( including Video which, for OVO, is coming soon ) is core to their business mode. OVO focus on specific content relating to a number of niche Australian sports including Gymnastics and Drag Racing.

To summarize, in 2015, Optus, Telstra and Virgin each partnered with a Streaming Video provider. It seems that the future of your mobile phone decisions might include, and perhaps even be led by, the content made available by the phone company you are considering.

What you need to know about SVOD on your phone

The content you watch on your mobile phone is not ‘free’. Virgin give a small amount of extra data each month to help you watch the streaming video. All the other phone companies just take it out of your data bundle.

Content Incentives were started by Vodafone based on their own UK experience. In the UK Vodafone has been offering streamed content for a while. At the beginning of 2015, Vodafone partnered in Australia with Stan. They had a number of motivations :

  • They want to lure you up:
    The structure of their pricing approach suggests that they were trying to lure customers up, on to higher spend plans, using the ‘free content’they marketed. Even now ( see table below ) Vodafone will give you a 6 month ‘free’ ( included ) subscription on a 2 year contract with an $80 spend. To get the 12 month ‘free’ ( included ) Stan access, you have to be spending $100 per month.
  • SVOD:
    SVOD is ( conceptually ) 90% of all the data you use. Average data usage on mobile phones is already 3.4GB. It is doubling every year. If there is one thing you can do to help manage your usage, it’s to watch less video on your phone.
  • Is it Zero Rated ?
    No. No, the content you watch on your mobile phone is not ‘free’. Virgin give a small amount of extra data each month to help you watch the streaming video. Everyone else just takes it out of your data bundle. Be careful ! You can usually use the same subscription ( for example to Netflix ) over WiFi. Only use mobile data when you need to. And before you do, consider how mucg you’ll need.

How much data will I use Watching Streaming Video ?

As usual, it all depends. Rough numbers :

  • Standard definition : 1GB – 1.5 GB per hour
  • High Def ( 720p ) : 1.5GB – 2GB per hour
  • High Def ( 1080p ) : 3GB – or more per hour

Key details of the plans they offer

Below, a summary table of the key proposition elements for the content sold by the major players.

Phone CompanyOffer still live ?
( January 2016 )
Content PartnerType of ContentIs the Content data ‘free’ or included ? i.e. is content data ‘Zero Rated ?’
VodafoneYes - ongoingStanVideo / SMH / Spotify No.
OptusNo – may returnNetflixVideoNo. It was charged. They offered some reassurance with their auto add data.
Virgin MobileYes – current offerPrestoVideoNo. You get 2GB of extra data to use the service on, added to your plan. You must watch the content every month on your phone and maintain your Virgin service.
TelstraNoPrestoVideoNo
OVOYes – ongoing and core to their modelAustralian V8 SupercarsAudio ( Video coming in 2016 )Yes

 

Is SVOD From A Mobile Company The Answer To a Question No One asked ?

Some might suggest that, instead of focusing on headline grabbing content plays, the phone companies should be covering the basics – network coverage, fast, reliable data and customer service – better.

To a degree, all this focus on SVOD is a shame. Buying Streaming Video from your phone company is a little bit like buying hammers from McDonalds. If you need a hammer and happen to be at McDonald’s, great. It’s probably not the first place you’d look for it. You’d hope McDonalds were focused on their knitting – making burgers – but, if they’ve got that covered, sure, give me a hammer.

And that’s the problem. There are still too many basic problems to sort out in telco. Optus and Vodafone have not focused on their knitting. Optus cover around 1.3million square Kilometers with their networks. Telstra covers 2.3 million square Kilometers with theirs. Hundreds of thousands of Australians have no option for mobile provider except Telstra. Optus do not cover nearly 1m square miles that Telstra does. Vodafone’s coverage is less.

Vodafone have, to this day, nearly 5 years after Telstra started building it’s 4G network, not publically released their national 4G coverage footprint. They are still building it and, I would hazard, are embarrassed to tell us the proportion of the Australian population they cover with superfast data.

Consumer complaints about phone companies have been falling. Most impartial observers still believe but there is still a lot to do to improve customer service in the world of telco.

Some might suggest that, instead of focusing on headline grabbing content plays, the phone companies should be covering the basics – network coverage, fast, reliable data and customer service – better.

Summing Up – When Content’s The Most Important Thing

I know people who work in telco who think that these streaming video services are free when you sign up to them from Telstra, Optus or Vodafone . They’re not!

Led by Vodafone, based on their experience with streaming video content in the UK, Australia had a bit of a ‘content moment’ in early 2015. It seemed that, when Netflix launched down here, each of the tier 1 telcos ( Optus, Telstra and Vodafone ) went a bit crazy. The first half of 2016 was spent trying to convince us, not just to watch more TV, but to do it on our mobile phones.

It has to be said that Optus probably succeeded in the propaganda battle. Looking back, most Australians’ memories would be of Ricky Gervais, Optus and Netflix. Hats off though for Sally Kiernan, who now manages marketing for Presto. Sally is a good egg and is obviously doing her job well. She’s taken her service through two dance partners ( first Telstra, then Virgin ) and convinced a company ( Virgin ) to buy her service which is backed by one of their main rivals ( Telstra. )

The average commute length rises every year. Sitting on the bus or in a car can be boring. If you’re not working, you could be enjoying yourself while you wait to arrive. Watching video on your phone is a perfectly acceptable thing to do in those circumstances.

However, to the degree that offering these services is just a cynical way to engender a behavior, ( using data to watch video ) the focus on content is a disappointing move by the bigger phone companies. The problem is, the way they sell content, it’s not free. And they should perhaps be focused on addressing the more fundamental problems they still experience with their services.

The key question people have when they watch video on their phone is – will this be covered by the phone company or come out of my allowance ? I know people who work in telco who think that these streaming video services are free when you sign up to them from Telstra, Optus or Vodafone . They they’re not !

When you’re talking about spending $100 per month with Vodafone to get ‘free’ ( included ) content, you should really be considering Boost Mobile or Amaysim. It’s often cheaper to get a SIM from a smaller phone company & your own home subscription ( separate to a mobile subscription ) to an SVOD service. Buying a monthly license for Netflix, Stan or Presto usually entitles you to watch on a mobile anyway.

We are not writing the plan + unique content model off, however. OVO and other network resellers offer innovative, great offers and unique segment focused content. The plans from OVO which use the Optus 3G + 4G Network include about the same data allowances as you’d get from Optus at the same price points. On top of that, your plan includes unique Supercar content. If you’re someone that loves Australian sport, you should probably consider them as your phone company.

You’ll get unique content from OVO that you won’t get elsewhere. What’s more, the criticism that can be laid at the door of Optus and Vodafone about focusing on the fundamentals of their business, can’t be said of OVO. OVO don’t own the network. They can’t improve it. Their customer service is independent from Optus’ already. Importantly, with OVO, the content they provide is providing using data which is included in your plan.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.