Why Murdoch’s media is gunning for your NBN

Kim Williams, ex Foxtel and now CEO News Limited.

Kim Williams, ex Foxtel and now CEO at News Limited.

By Kieran Cummings (@sortius)
February 27th, 2013

It seems a day doesn’t go by where articles are being posted to News Limited (Murdoch) websites with nothing but negative spin for the NBN. Most, if not all, are founded on poorly constructed arguments that ignore technology & the reality. They all seem to point to one solution: anything the Coalition are saying they’ll deploy.

While this does reek of patent bias amongst Murdoch’s Australian arm, I feel this goes a little deeper than just wanting a Coalition government, but a fear of becoming obsolete in the age of IPTV (Internet Protocol Television).

While FTTN (Fibre to the Node) can offer basic IPTV, it cannot offer multi-set full HD broadcasting as FTTH/P (Fibre to the Home/Premises) can. With this in mind, it doesn’t take long before it’s apparent the likes of Comcast & Time-Warner in the US, are bleeding subscribers or seeing a slowdown in subscriber uptake due to internet streaming services such as Netflix or Amazon’s Prime service.

While we haven’t seen a drop in subscribers here in Australia, there has been a slowdown in subscriber uptake that is sending a message direct to News Limited/Fox: kill off any advancements in broadband speeds before it kills off your business model.

WHAT MAKES FTTN BETTER FOR PAY TV PROVIDERS

One thing to remember is that the main differences between FTTN & FTTH are, speed, service area, & reliability, with FTTN failing on all three. These differences can mean someone can happily use an IPTV service, or you are relegated to stuttering pixelated video. The one (& only so far) pure IPTV example I can give in Australia is FetchTV, with others like Quickflix not quite making their mark due to limited outdated content.

FTTN, which a large portion of Australia already relies upon, can be of many flavours, but the generally accepted limit is VDSL2+ up to 1km, VDSL2 up to 2km, & ADSL2(+)/ADSL1 after that. Looking at these numbers, even if VDSL2+ is used, a large portion of Australia will not be able to stream more than one channel to one TV comfortably in HD. Some will not be able to receive HD video at all, having to opt for 1.5Mbps “lite” services offered by IPTV providers.

sdtv-vs-hdtv-vs-4k-uhdtv-graph2-706px-a (1)

With this in mind, we can see that opting for slower, less reliable, with a smaller service area for higher speeds, broadband benefits satellite & cable TV (pay TV) providers by limiting customers’ ability to utilise lower cost IPTV services. Don’t get me wrong, Foxtel are dabbling with IPTV with massively crippled plans that are far more expensive in dollars-per-channel than their set-top-box contract locked services.

Essentially FTTN offers a moderate speed boost to allow for slightly faster speeds, but not so fast as to make pay TV obsolete. This benefits pay TV providers, but not customers or content producers, leaving a monopoly in place to reap the rewards of archaic infrastructure that’s way past its used by date.

STUDIOS ARE GAME

It’s clear that content producers aren’t fazed by IPTV service providers, with Netflix in the US signing up many studios/channels to their service, & FetchTV offering a number of non-Fox channels for a fraction of the cost of Foxtel on Xbox/Smart TV (Foxtels pure IPTV service).

So where does that leave the likes of Foxtel in such an open market? Well, on the pointy end of a large stick. Murdoch & his ilk aren’t prepared for digital TV distribution, much like they weren’t prepared for digital news distribution & digital music distribution. Instead of being agile enough to deal with new technologies, pay TV providers have gone for the “entrench the customer” model that has not only failed for other mediums in the past, but turned customers away from their offerings.

With so many content producers embracing smaller start ups (or as the pay TV providers see them, up starts), what leverage do the big names in pay TV have left? The answer is simple: little to none. With pay TV you are limited to watching what providers broadcast & a small amount of on-demand content accessible via your internet connection. With IPTV services, multicast is offered for a small amount of content, but a majority of the content is on-demand, allowing customers to pick & choose what they watch. This has a two fold benefit for content producers: being paid for what is watched, not what is broadcast, & being able to accurately measure what customers watch the most.

WHY ARE PAY TV PROVIDERS SO AFRAID OF IPTV

The biggest fear for pay TV is advertising dollars being sent elsewhere as online services offer more affordable advertising rates than pay TV or free-to-air TV can offer. Instead of forking out thousands of dollars on a contract designed to benefit media conglomerates, advertisers can produce & deliver an ad, while getting immediate feedback on its effectiveness. They can even tailor an advertising to suit a user.

You’re interested in sport & cars? You will see mainly sport & car ads. You’re a geek/gamer like me? Tech devices & game ads will fill my screen. This is something that pay TV can’t do, even with an internet connection. They have invested millions setting up control rooms designed around the multicast (one source, many users) ideology, rather than unicast systems like Netflix which require little more than a web interface & a decent server farm to deliver content to millions of users.

Future Generation of TV - Multicast, IPTV

Future Generation of TV – Multicast, IPTV

FINAL WORDS FOR A DYING BEAST

The fear of obsolescence is palpable with both major & minor studios signing deals with IPTV providers, & IPTV providers expanding into markets traditionally dominated by cable & satellite providers. The only option left for a beast that’s dying is to lash out at younger, more agile companies making use of technology. The only way they can do this is by tainting the journalistic integrity of the newspapers & news broadcasts they own, removing all doubt that the likes of News Limited are existing on borrowed time.

In my experience, companies closest to death are noisiest, & boy are these old boys of the media landscape getting noisy about the biggest infrastructure project Australia has ever seen. Their newspaper revenue is down, subscribers are being turned off lock-in contracts, & their attempts to subvert social media (remember Myspace?) all point toward desperate people with nothing else left but to sabotage attempts to benefit citizens by feeding them fear, uncertainty, & doubt.

From laughable articles stating wireless is better than fibre (how do you transmit the data from the wireless towers guys?) to smear campaigns designed to bring those knowledgeable on technology into disrepute, this campaign against fibre optics will not stop until these media organisations die out like the dinosaurs they are.

Read more:

Coalition’s NBN plan to stop consumers taking control of media by Kieran Cummings (@sortius)

Tony Abbott’s scripted lies about #NBN costs by @zackster

Jack McCaw’s NBN story  by @JacketMcCaw

Why Jake’s impatient for the NBN

 

Comments


  1. Bloody Brilliant! I have been trying to tell everyone that, though in a dumb way, not in a lovely techy fact style you can. Will be passing this around big time :)


    • Yeah Noely me too.

      My non tech uneducated line I post in the MSM as often as possible :

      “If I could have the NBN today I would have paid for it yesterday.”

      Thanks Kieran.


  2. Excellent analysis & very well written. Did know that FTTH/P was superior +++ to dodgy old wireless (yes how do they expect the stuff to get to the tower??) but not in the exact way you have described it, Kieran. You did make the whole process easier for non-tech heads to understand.

    It is a disgrace that this fantastic vision for Australia could be jeopardised solely because it did not suit the business plans of one man, who doesn’t even live in the country. What if someone had thought the same way about the Snowy Mountains Hydro Electric Scheme as it could make a candlemaker go broke.


  3. I did a search on technology speculator the other night when I put 2+2 together after criticism of the oppositions “non mystery on the run plan” for the NBN was not posted (I have posted in the past) A 100% owned subsidiary of News Ltd… the vibe over there has changed somewhat… criticism of Quigly ect….

    I had a bit of hunch on putting Murdoch in the picture last month in my blog

    https://politicaljelly.wordpress.com/2013/01/24/build-it-and-they-will-come-to-buy-it-back/


  4. Oh sorry, great article, I totally concur…:-) well done.

  5. Anthony Wasiukiewicz says:

    Hi Sortius.
    Always a pleasure to read information for the NBN. However I find your articles a little tricky to digest, which makes me wonder about the general public. Further, although I can understand why, they come across as politically leaning, which would off put some readers also. May I be so bold as to suggest keeping it simple. As Einstein once said, If you can’t explain it simply, you don’t understand it well enough. One option is to develop two sets of articles. One for the tech industry. And the other for the layman. And try and keep it as politically neutral as possible. And avoid attacking the media outright as many people trust the media. And they will be put off at the very accusation that the media has a vested interest (however true).Rather than accusations, just show the numbers, in a way that Joe Blogg Average can understand. Tact is you friend. Most of us don’t care who runs the country. We just care if the numbers add up. And we do what makes sense. But if we can’t understand what makes sense, we can’t make up our minds… :-)
    Cheers
    And keep up the good work.


    • Yes I agree with your take on the way to get through to different needs of readers but I must add one large problem since the NBN was first taken up is the misunderstanding broadcast of the cost, the general public fail to absorb the cost is a future investment for everybody and will return the investment cost to the people. The a great number of the public see a frightening $40billion figure but fail to understand how this is funded and this should be an area that requires simple understanding because as we all know fear is a cowards tactic and “when one turns the light on the grand kids can see no one is there “


  6. Kieran
    A good read, some simple messages for the lay man as suggested by Anthony W, tell them
    NO phone line rentals.
    NO long distance call charges,
    Overseas calls even cheaper and
    if you use skype via a computer or IPAD free as we do, chat for as long as you want and the bonus of seeing each other.

    I have already commented that the NBN will see print media decline even faster than it currently is. They the MSM need to embrace the NBN and not oppose, the opportunities for them are limitless. It is sad that one old miserable man with more money than he can ever spend desires even more, rather like Gollum seeking the ring.

    One last thing your para “From laughable articles stating wireless is better than fibre (how do you transmit the data from the wireless towers guys?)” don’t you mean to the wireless towers or have I missed something. rgds


  7. Anthony,
    Otherwise known as “show not tell” where an author lays out the details and allows the reader to reach the conclusions on their own.


  8. Those opposing the NBN should come and live in rural Australia for a while, and experience all the delights of poor connections, slow downloads, and a drop out rate that is equal to customers at a pub with no beer. Bring the NBN on, I say..


  9. Reblogged this on auguries14 and commented:
    Rupert doesn’t like NBN


  10. Great article,
    just read an enormous but extremely comprehensive one on the ABC by Nick? Too.
    And of course the Murdoch and Lib apologists are out in full force.
    Bring on the NBN, Australia needs it yesterday. Sadly I’ll only get tower here, being remote. But given the Libs plan ATM I’d have nothing on their copper, phones been dodgy for 10 days and another few before Telstra here to fix it!
    Murdoch will do whatever it takes to have the Abbott system in.


  11. Reblogged this on lmrh5.

  12. margokingston says:

    Build it and they will come to buy it back again. http://t.co/cfoDcZbpGC More NBN reasons why Murdoch backs Abbott
    ‘I am sure that Rupert is looking at NBN co and drooling over its capacity to deliver all of his services. I will draw a long bow here, with no more than a strategic hunch based on News Ltd.’s quest for word domination in media markets across the globe. The current negativity in Murdoch press toward the Gillard government and NBN co sees a win-win situation for Murdoch.

    ‘If the coalition wins government and Abbott plans to sell off NBN co, Rupert will be there with a big open check book. If News Ltd. owns this cash cow he will have no need Telstra. Telstra however, will still need to buy content from Fox to deliver subscription TV.’


    • > If the coalition wins government and Abbott plans to sell off NBN co

      Do you realise that Labor’s plan is to privatise NBNCo as soon as the risky part (build) is mostly competed?


  13. Thanks Sortius this IPTV verses pay-tv now clears it up for me as to why Mr-Talkbull has been lending his arse and credibility to Mr-Rabbits nbn-demolition plan. I always knew Mr-Talkbull was crapping on, when he was trying to sell fiber-2-node plus copper, when common sense says fiber-2-user will perform faster and better with less `jointing` in the system. lt`s also a highly interesting dynamic that the party that so-called represents all Australian Business, will sell them all out and prefer to shill for a foreign entity.


  14. I covered the threat that the internet and the NBN posed to Murdoch’s empire in part 5 of The Murdoch Virus back in September of last year. You can, if you choose to do so, read it here: The Murdoch Virus Part 5 – Murdoch And The Internet

    Thanks Sortius for expanding on the premise of that article with some technical details.

  15. Cant hide but anyway..... says:

    Of course, the NBN is not just about download speed and it doesnt only threaten News Ltd. Given all media professionals must consider their current or future employment at News or Fairfax, is it any wonder the vast majority of media professionals have bought into the continuous Fear Uncertainty & Doubt smear campaign aimed at the NBN?

    I’m surprised that more hasnt been made of this: the Coalition being anti-NBN effectively makes them anti-education and anti-health, as these services will be immensely assisted by fast, contention-free and congestion-free symmetrical internet speeds. It also makes the Coalition anti-business, especially in regional areas.

    The very high _existing_ (but mostly hidden) cost of travelling to cities to receive services which could be delivered by the NBN is almost never mentioned.

  16. Joy Cooper says:

    Could the fact that Tony Abbott is alleged to have a weekly lunch at News Ltd headquarters be of any significance re his anti-NBN attitude?


  17. Reblogged this on tropicwave.

  18. Denise Murphy says:

    If you could find a low-tech way of saying this, and in a few sentences, l’d find that very helpful. Unfortunately, the 2010 election will be a re-run of 1976, where an evil media baron decides who will govern and destroy the infrastructure of our country.


  19. > While FTTN (Fibre to the Node) can offer basic IPTV, it cannot offer multi-set full HD broadcasting as FTTH/P (Fibre to the Home/Premises) can.

    Nobody is using IPTV. IPTV is antiquated. The future of television is web streams, and the compression gain doubles about every decade or so. You can install fixed-lines today and they are by default ‘future proofed’ because of improvements in compression. This is why nobody uses IPTV, because h264 over HTTP is much more efficient.

    > With this in mind, it doesn’t take long before it’s apparent the likes of Comcast & Time-Warner in the US, are bleeding subscribers or seeing a slowdown in subscriber uptake due to internet streaming services such as Netflix or Amazon’s Prime service.

    I use Netflix in the USA from Australia, and I watch HD streams, and I am 5km from my exchange and I am using normal ADSL. It works for me now, from another country, using an antiquated technology, then I am sure it will continue to work for me when the copper only has to travel 1km to get to fiber and uses another xDSL.

    The fact is that you are taking raw bandwidth figures, like this argument is taking place in the 90s prior to either mp3 or mp4 being invented and implemented. Even 4K streams will be 10Mbit a second once the content reaches that point. We simply don’t need all that additional bandwidth, its like buying a quad core gaming PC to run notepad on it. Apps are getting smaller and smarter.


  20. As for the conspiracy theory:

    > Murdoch & his ilk aren’t prepared for digital TV distribution

    I am already paying Foxtel monthly for a digital only subscription. I watch it on my xbox, computer or tablet when I am out and about. As somebody who splits his time in the USA, I can tell you that Foxtel are light years ahead of the US cable companies.

    Foxtel would prefer we all switch to internet-based cable tomorrow, since it reduces their distribution costs by an order of magnitude. No more satellite boxes, no more satellites and most importantly no more purchasing satellite spectrum.

    Fox own too much good content in Australia to be beaten by somebody like Netflix landing here. Most important they own the sport.

    > It’s clear that content producers aren’t fazed by IPTV service providers, with Netflix in the US signing up many studios/channels to their service,

    Netflix has been losing content deals recently. Google ‘netflix starz’

    > & FetchTV offering a number of non-Fox channels for a fraction of the cost of Foxtel on Xbox/Smart TV (Foxtels pure IPTV service).

    Foxtel is not an IPTV service, nor is Netflix. Not in the classic sense, not in the sense that you multiply the video format out to get a bandwidth rate.

    > what leverage do the big names in pay TV have left?

    Sport, which is what drives cable television revenue around the world. Murdoch owns all the big draws – premier league football, a-league, NRL. Not to mention the favorable movie deals that Netflix doesn’t have anymore.


    • I don’t usually reply to comments, but your comments are so fallacious & misinformed it’s not funny.

      Netflix has picked up far more contracts than the single loss, maybe google “Netflix Dreamworks” or “Netflix Disney” or “Netflix Open Road Films” or, well, you get the picture.

      Add to this that they are creating their own content now.

      IPTV = Internet Protocol Television, quite simply means any OTT service. You I’m sure as your time as a TechCrunch writer you would have come across the term, so I’m surprised you seem to not understand it here. Saying that “IPTV is antiquated” shows your lack of knowledge in technology.

      Foxtel on Xbox is a joke, as I stated, dollars per channel are FAR higher for it to deter people from using it as their main pay TV source. I’ve also been informed the same service will be stretched to a Foxtel IPTV service shortly.

      You might want to check your facts before posting garbage such as this, then again, I expect no less from a TechCrunch writer.


  21. Thank you. I’ve been confused about the what the NBN even was, until now! Cheers mate.


  22. Very good article, agree with all of it. There are a couple of typos*** you might like to look at:

    While this does reek of patent bias amongst Murdoch’s Australian arm, I feel this goes a little deeper than just wanting a Coalition government, but*** a fear of becoming obsolete in the age of IPTV (Internet Protocol Television).

    Maybe change ‘but’ to ‘more’ or ‘more like’ or ‘it’s’ or just remove the word ‘but’?

    They can even tailor an*** advertising to suit a user.

    Remove ‘an’ or change to ‘an advertisement’


  23. My thoughts exactly. With News corp / Ltd you can be sure of one thing. Self interest will always come before facts.
    I bet it scares the pants off them that the Sporting codes could so easily, and with little relative cost, stream their own content without a gatekeeper if Australians had Gigabit speeds to their door. Real competition is anathema to their type no matter their bleating about “freedom of speech”.

  24. Thoughtful says:

    Interesting but it doesn’t get past the a priori objection to the NBN having been adopted without any economic or commercial assessment to justify it as a political fix when the election promise to provide better broadband at one tenth the cost of the NBN was shown to be hopeless and an embarrassing shambles. And it doesn’t demonstrate that the a priori probability that a proven entrepreneur in the field of Internet based services would be able to do the essential job more cost effectively.


  25. I think Julia should use this article in her election material. Imagine driving home on the freeway and reading this. It needs a big billboard with a link to this story and if you are lucky, you will be able to read it without stops and starts.


  26. This is all moot, null and void if you don’t help the ALP in the lead-up to the election. It’s great to write excellent articles, and be really well informed, but you need to get out and sign up to your local ALP campaign, go doorknocking and phonebanking and donate money to you local Labor candidate. The persuadable voters aren’t going to be reading these articles- you need to get them on their front door or on their phone and explain why the Libs are wrong and dangerous for the nation.

    Thanks again for this excellent and informative article.


  27. The NBN is delivering nothing to Rural Australia that OPEL (which Labor cancelled in 2007) would not have delivered. In fact by not considering FTTN it means that many small towns (less than 1000 premises) considered too small to receive fibre will be left with slower wireless only connections and copper phone lines. In many of these communities VDSL could deliver faster than 50Mbps because homes are relatively close to the exchange. I have relatives who will have their ADSL disconnected in 2015 and replaced with a slower wireless service.


    • Mathew, your comment reminds me of the jerno who looks around to find some form of discontent about a subject “any subject ” for all we know maybe interviews 100 comes up with one then reports there being disquiet on the subject of course any project as big as the NBN will have, but in this case I’d like you to check your information and come back online


  28. Yep, Rupert’s doing the usual- using government to nobble competition. Free market my hat! this criminal has had the game rigged- pay TV monopoly etc etc for years now. Naturally hig piglet ‘journalists’ have all attacked the NBN. IF the NBN goes down to Tony (rupert’s glovepuppet) then thats it for open debate in Australia.

  29. Animalia says:

    Where is my comment? Rupert is a criminal, if this animal shuts down the NBN or controls it that it for democracy.


  30. AT LAST I get it. Thank you … I think. I now unfortunately see what’s really going on in Australian politics. An aged, inflexible media king is willing to hobble an entire nation for the sake of protecting his outmoded technologies. From his perspective, democracy must seem so incredibly annoying!


  31. Thinking of setting up the FORM PARTY ,that is ” F… OFF RUPERT MURDOCH ”
    Anybody interested in joining ?


  32. http://www.youtube.com/watch?v=MtCDa1tvIjE&feature=em-lbcastemail

    The above link is one of the few that I subscribe to and yet they are going live, albeit only between 6pm and 8pm it is no doubt going to be the start of many. Clearly, when more people start there own live TV channel it starts to thin out two things, Murdoch’s advertising revenue and his unfair and inequitable journalism. Hopefully as Murdoch and Fairfax dump more and more Journos, they in turn can work together and create their own channel. I also hope that Independant Australia (blog) and a few other groups start their own live news, then we will see Murdoch’s empire become nothing but a pass time, assuming the Liberal’s don’t try to introduce some kind of online controls like they have done with online casinos. By the way, nice article.


  33. Not from around here, and mystified by the NBN acronym, which isn’t explained, whilc IPTV is. Help?


  34. Excellent article. I work on the NBN and am an electronics technician. I have been explaining this to EU’s for a while.. now I will just print and share.


  35. Nice, article. Did you also know the Telstra Foxtel alliance for the 100,000+ VDSL “trial” is locked to Telstra, users don’t have a choice from the 40+ providers on http://nbncompared.com.au

  36. Tinfoilhatter says:

    While talking to my (aspiring) federal ALP candidate, she explained that talking to people about FTTP NBN was difficult as most had wireless or ADSL and couldn’t see any difference.

    I asked her to explain the ‘A’ in ADSL as being exactly what it is – asymmetrical – lagged, congested, out of sync. I asked her to use this analogy to explain the benefits of symmetrical NBN, as opposed to asymmetrical, in areas like health and education.

    I deliberately talked to her in ‘lagged speak’ (buffering my words) to emphasise the point – and she got the gist really quickly. Hope she can explain FTTP real-time advantage a bit better now.


  37. > I asked her to explain the ‘A’ in ADSL as being exactly what it is – asymmetrical – lagged, congested, out of sync. I asked her to use this analogy to explain the benefits of symmetrical NBN, as opposed to asymmetrical, in areas like health and education.

    Do you realise that residential NBN services are asymmetrical as well? 12/1, 25/5, 25/10, 50/20, 100/40Mbps. Thanks for helping your local candidate look like a fool.

    As you can see from my other posts in this thread, the difference between what people think Labor are promising and what is being delivered is a vast gulf. Most Australians seem to think NBNCo are building the equivalent of Google Fibre (1Gbps, no quota for $70/month) whereas Internode charge $74.95 for 300GB at 25/5Mbps.

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