Optus vs Telstra On Content and Data Inclusions – Who’s Best ?

netflix

60 second guide

  • Optus and Telstra have both included free data for streaming services like Pandora (streamed audio) and Netflix (Streamed Video) in some of their plans.
  • Both Optus and Telstra have also purchased their own sports rights.
  • Optus own the rights to the EPL (English Premier League) in Australia
  • Telstra own the rights to the AFL, NFL, NBL (Basketball) and Netball, too.
  • Their goal is to attract new customers with their offers and keep the ones they have.
  • Vodafone have partner deals ( e.g. with Pandora) but have not acquired content rights.
  • Below, we tell you what you will get by way of content from Optus and Telstra.
  • We compare them directly and tell you how much this content will cost you.
  • In summary, to get video content streamed to your phone ‘free’ (unmetered) you’re going to be spending at least $70 a month.
  • Or, with Optus, you can buy unlimited access either to the EPL or Streaming Video for $15/$10 per month respectively.
  • Below, we explore the key question to ask yourself when you’re considering Optus vs Telstra for streamed entertainment questions: Do you already have an account with Netflix / Presto / Stan?

Telstra and Optus’ Content Frenzy

There have been multiple overlapping announcements from Optus and Telstra since the start of 2016, about the content they have available to their customers. That’s no problem if you’re following those announcements in the news. Each is explained reasonably clearly at the time by carefully briefed journalists, including me.

The problem comes when you’re considering buying a new phone plan / SIM Only / Prepaid plan and you’re wondering whether the deal Telstra and Optus offer is a good one compared to the competition.

As we have pointed out in many other articles, smaller phone companies generally offer better deals in the SIM Only / Prepaid market. In most cases, they also use exactly the same network as, for example, Optus and Vodafone. In general, however, they do not offer streamed video as part of their plans. There is one exception to that, OVO Mobile and we have written about them extensively.

We lead lives which seem to be more digital every day. Optus and Telstra understand this and want to use it to their advantage. They want to differentiate the service they offer from what the MVNOs have in market. They’re using these content rights to do that. When you are comparing the data in Optus’ plans with the data in Amaysim’s plans they want you to stop and think. Amaysim are almost always better value when compared head to head on price / GB. But throw in ‘free’ access to the EPL and you might just choose Optus over Amaysim, despite the difference.

The problem with what Optus and Telstra have in market, in the way of streaming video, at the moment is that it’s incredibly complicated. There is no simple, umbrella overall position in place. We try and make it as clear as possible.

Before we get in to it – they key word – ‘unmetered’

From a consumer standpoint, it’s simple. You will not be charged from your data bundle for data which comes from services stated in the marketing materials.

When you’re starting to consider using (watching / listening to) content on your mobile phone, the key word to be looking for is ‘unmetered.’ Unmetered is one way of expressing what the phone companies call ‘zero rated’ or ‘pass through’ traffic.

The telco industry is very heavily regulated. Phone companies get fines if they mislead customers. That means they have to avoid advertising things as ‘unlimited’ and ‘free.’ The same goes for the data they are ‘giving away’. That’s why they have to use a non standard term like ‘zero rated’.

Inside the phone companies, their billing systems charge according to the data that you pull down from their network to your device. There is an option to negate and ignore particular URLs from which that data comes. For example, they might give the billing system an instruction like ‘Don’t count data from any URL starting Pandora.com/’ or ‘Don’t count data used any URL starting Netflix.com’

It’s this ‘zero rating’ which marketers call ‘unmetered.’

From a consumer standpoint, it’s simple. You will not be charged from your data bundle for data which comes from services stated in the marketing materials. If you had a 1GB data bundle and you watched several hours of streaming Netflix, you would still have 1GB of data, so long as your watching was ‘unmeterd’.

It can be helpful to understand the technology behind the circumstance, however. One reasonably subtle point will help to reinforce why. If you check the terms and conditions of Optus’ ‘unmetered’ streaming services. You will still be charged for the data associated with any advertisments you’re showing during your free streaming. That’s because they come from a different URL – one which does not start www.netflix.com.au!

Other aspects of Optus and Telstra’s content services you need to know

Streaming is the act of downloading an ongoing drip drip drip of data to your phone. Streaming is the act of downloading an ongoing drip drip drip of data to your phone.

  • What is ‘streaming’?:
    Streaming is the act of downloading an ongoing drip drip drip of data to your phone. That drip drip drip is required to construct the digital content on your device. When you’re streaming, your phone is attached to the phone company network almost constantly. It downloads just enough to give you a few seconds of buffer in case there is an interruption. This is different to ‘downloading’ in the way that term is most commonly used. With Downloading, mostly, people completed download the content they are about to watch and then, when the download has finished, they watch it.
  • Streaming music services:
    There are a number of streaming music businesses. You will have seen and heard of at least some of them. They have been in the news a great deal over the last few years. Apple Music, Pandora, IHeartMusic and Spotify are just a few. We explain which phone company provides access to which service, below.
  • Streaming Video services:
    Streaming video services are more familiar to the average Australian. Roy Morgan suggests that nearly 3 million Australians have watched Netflix or one of it’s Australian rivals. Both Optus and Telstra offer access to these services. They offer access under different terms, however.
  • You may also hear of Streaming video as SVOD:
    SVOD means Streaming Video On Demand and it’s an increasingly common abbreviation in the industry. Those streaming video services we mentioned are SVOD services.

How much data will these services use ?

We have covered data usage in a separate article.

In simple terms, Video uses a lot, lot more. A standard definition TV show, watched on your phone will usually ‘cost’ you about 1GB of data. You would have to go for. With streamed audio, you’d have to listen for around 8 hours to use 1GB of data, even at the highest quality setting.

Optus vs Telstra – comparing the sport included in their phone plans

Telstra have said they want to be number 1 in sport on mobile devices. Their time managing entertainment entities like Foxtel give them an edge in the experience they need to be successful in the field.

It’s a stereotype, but there’s some truth to it. Sports like the AFL and NRL tend to be followed by men more than women. Some (and this bit applies to both men and women) supporters are fanatical about some sports. Its this fanaticism that the phone companies are trying to take advantage of. The research suggests that people will leave their existing phone company and move to a new one to get the sport they love.

  • Optus’ Sport inclusions:
    Optus provide access to the EPL (The English Premier League) on some of their plans. On others, they charge $15 per month. Content is unmetered and they use an app to help you manage the experience. Optus say that the EPL is just the first in a list of sport services they want to offer to their customers to watch on their phones. We have full details of what plans include what in our summary table below.
  • Telstra’s sport inclusions:
    Telstra provide access to the AFL / NRL through an app. They have recently acquired similar rights to Australian basketball and Australian netball. Postpaid plan holders get a free ‘season’ pass to one of these sports each season and can buy access (it’s not cheap, over $150 per season) if they want to watch another. Content is unmetered and they provide an app to help you manage the content.

Telstra have said they want to be number 1 in sport on mobile devices. Their time managing entertainment entities like Foxtel give them an edge in the experience they need to be successful in the field. The early days of Optus’ involvement with the EPL – the pricing they released and the technical problems they’ve had with the first few games they have shown indicate they have some catching up to do.

Optus vs Telstra compared for Netflix, Stan, Presto and other ‘SVOD’ Services

Don’t forget, with Optus, you will need to have your own, existing Netflix, presto or Stan account.

Services like Netflix, Presto and Stan have a wider appeal than sport. People might feel less inclined to move phone companies just to get it.

Don’t forget, with Optus, you will need to have your own, existing Netflix, presto or Stan account. They are not offering that as part of the service they are providing you. All Optus is doing is extending the number of places you can watch it.

Optus’ addition of a $10 fee to provide their customers with unlimited (and unmetered) streaming of these video services is an interesting price point. It was Optus who, 3 years ago, broke the mould and came up with a $10 for 1GB of time. The significance of the overlap is not to be missed. Both decisions of the $10 ‘bolt on’ solved the same problem, concern over huge data bills. Everyone has had one at one stage in their life.

Telstra on the other hand throw a good deal in to the mix. If you sign up to a selected number of their postpaid plans, you will get not only unmetered access to the video content but you will also be provided a 3 month free subscription to Stan, Presto or Netflix, to watch it.

Comparing Telstra vs Optus on streamed audio services

When it comes to streamed media, Optus have a broader offering than Telstra.

Streamed audio is offered across all plans by both companies. Although not insubstantial, the data usage of streamed audio compared to streamed video is relatively poultry. As a result, on any Optus or Telstra plan, you will find some streamed audio. In past years, Vodafone was actually the leader in providing access to unmetered streamed audio services. Now Telstra and Optus have copied them.

  • Telstra:
    Telstra offer 6 months free streamed Apple Music on both their prepaid and postpaid plans.
  • Optus:
    When it comes to streamed media, Optus have a broader offering than Telstra in this regard. They offer free unlimited streaming for a variety of streamed audio data services including Pandora, IHeartRadio and Spotify.

Optus got to the streamed audio stables first and took the best agreements. The number of services they provide are likely to appeal to a broader range of people.

Vodafone’s view on free streamed content

This is a comparison article which is intended to help you choose between Optus and Telstra when it comes to streamed content. We will cover Vodafone quickly.

To a degree, Vodafone have been caught sleeping when it comes to content. You could say they were focused on more important things like the $4bn they have spent improving their network. Vodafone do offer some other content related deals.

And to give them their due, they are at least aware of what’s happening ! Vodafone Australia CEO Inaki Berroeta laments the situation and suggests strategic missteps from the competition. In August 2016 he said, “Content is extremely expensive, and is extremely difficult to monetise it, unless you create it. That’s my view,” Berroeta argued.

He went on, “In principle, I think that the agreements we have are more sensible around partnering with people that create good content, and then be able to offer that content to customers, than just buying rights with a very difficult financial return.”

The problem for Vodafone is that they’re not big enough. Content only works when you have scale which is why it appeals to the two bigger companies, Optus and Telstra. These content rights that each company is signing up to cost a great deal of money to buy. We saw this with Optus’ $180m investment (and subsequent – coincidental ? – staff layoff of 200 people – which saved them about $200m)

Vodafone have suffered in the press since 2010. They lost some pretty impressive customer numbers. Were they to then spend $200m on content, the average cost per user for this content would be very high.On top of that, Vodafone may also fear rekindling the network troubles they’ve had by loading up their new and improved network with poorly quantified but substantial data weight.

This is Australia – there are alternatives

One rarely discussed but often undertaken alternative to streamed video is illegal downloading. We are not suggesting it’s a good thing but the reality is, Australia downloads more content illegally than almost any other country.

Downloading content (stealing it) and uploading it to your phone is relatively hard on an iPhone and relatively easy on an Android Phone. It comes down to the transfer method from desktop / laptop to phone. Most content is downloaded to desktop computers. Once it’s there is a file format like mp.4 or .avi it needs to be transferred to the phone.

Some Androids even have swappable memory slots which makes the transfer from the desktop to the phone. With Apple phones, you need to use iTunes to transfer and that gets messy.

With a price point of only $10 a month, for unlimited streaming, Optus have done well. The hassle of regularly transferring video / music to your phone is well worth the spend, even on the relatively easy to use Android service.

The risks Telstra and Optus face

  • How profitable it’ll be for them is yet to be seen:
    By their own admission, data network utilisaiton has increased 30 percent in the last year as a result of data usage (Source: Telstra.) And remember, that’s over (roughly) the last year. That was before they started actively marketing streamed video services on phones and including special offers in their phone plans. Mobile network traffic will be exploding now just as fixed broadband traffic increased dramatically when Netflix launched in Australia. Every GB of data costs the company something – that’s how business cases are done in big phone companies. Let’s see how much money they make with these unmetered / unlimited plans.
  • Whether it will attract new customers is questionable:
    Streamed video is nascent technology. As I said above, Netflix has been watched by 3m people in Australia but that’s only about 15% of the total. And here, we’re talking about the proportion of that 15% who want to watch Netflix on the move and are prepared to pay for it ! Additionally, since the top two providers are essentially matching each other with their offerings, it is unlikely that one will attract too many from the competition.
  • The network impacts could be bigger than expected:
    Having been a Product Manager at Optus and Vodafone I can tell you that before an initiative like this is released to market, careful network planning is undertaken to make sure that expected customer numbers and data use per customer do not add up to derail the network. Of course, those calculations can be wrong and then you suffer very public network meltdowns of the sort Telstra have been performing all year.

Optus and Telstra’s free streamed video and audio content summed up

 So who’s best company to pick when you’re considering streamed video or Audio on your phone ? Telstra or Optus ? The answer is, it depends.

So who’s best company to pick when you’re considering streamed video or Audio on your phone ? Telstra or Optus ? The answer is, it depends. If you are in the market for a new SIM / phone contract and you’re comparing, it kind of comes down to a simple question.

  • If you have an existing Netflix, Stan or Presto service:
    If this is you then Optus are probably the best bet. Their $10 per month streaming offer will give you ‘unmetered’ access to those services and you can watch to, as Tim Cowan, the guy leading the activity has pointed out ‘to your hearts content.’
  • If you don’t have an existing Netflix, Stan or Presto service:
    Try Telstra. The best thing about their service is that they provide you not just unmetered access to the service but access to Stan, Presto etc, too.
  • For streamed audio:
    There is very little difference between the offerings from the different streamed audio providers, other than name. They all have largely the same content.

Of course, this is just based on the services. You will also have to consider network quality and pricing.

It’s early days in this content competition. Both sides are talking big. Telstra have said they intend to own mobile sport. They’ve also just recently launched a national advertising campaign focused on making your mobile the most entertaining place to spend time! Optus have said that this is ‘just the start’ of their sport and content ambitions.

These content offerings from the telcos do fix some of the problems that just having sports content

As we’ve seen, they address a real need. A genuine concern. The one aspect of the marketing they get clear is Optus’ ‘unmetered’ approach.

Make no mistake this is part of a cultural shift. We are being educated by the phone companies through their free content inclusions to make content part of our days. They seem the be targeting the long commutes with these new services and taking some reasonably bold steps to add value to the digital lives we lead. We live in a huge country and there are some long drives. ABC research indicates that the average commute in any of Australia’s big cities is around 30 minutes each way. There is room there for these offerings to grow.

The entire success of the enterprise hinges on the success of streamed video in Australia. And the success of that, in some ways comes down to the question: Is the variety of content that these relatively young SVOD services offer in Australia sufficient? I’ve tried these streaming video services and, at the moment, my vote is no.

 

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.