[Satellite News 12-01-09] Australian pay-TV operator Foxtel is at the forefront at bringing advanced TV services to the regional market. In early November, Foxtel added 10 new HD channels, giving it a total of 15 HD channels to subscribers.
    In an interview with Satellite News, Foxtel’s executive director of content Patrick Delany talks about the fiercely competitive Australian HD and the company’s development plans for 2010.

Delany: I would like to double our HD subscriber base in the next 12 months. Our observation of HD in Australia is that it is a bit like the DVR experience. It really captures peoples’ imaginations, which you see when people interact with it. With DVDs word of mouth was very strong in promoting DVDs in Australia. Once the early adopters gave the product strong word of mouth, it really took off. I think we will see something similar in terms of HD. I am hoping with these extra 10 HD channels, will drive extremely good word of mouth for HD.

Delany: One of the restrictions we had was limited bandwidth. However, with the launch of a new satellite here (Optus D3) and our continuing access to HFC cables we are able to explode out the amount of HD choice and flexibility we offer customers.  When you combine this expanded HD channel choice with a disk drive with massively expanded storage capacity, and a revamped electronic programming guide you can really take your HD offering to the next level. The strategy then is about offering customers HD value, choice, flexibility and control over what they watch and when.

Delany: With the initial channels that we launched, we had maxed out capacity on our satellite. We have recently seen the new D3 satellite being launched, which means satellite capacity is much less of a constraint now we will be using significant capacity on that satellite to launch HD channels. We plan to launch many more HD and SD channels. We are going to have a very big revamp of all of our technology and platform to make the most of a combination of DVR technology with things such as advanced interfaces, as well as new HD and SD channels. We will use the satellite and cable to bring the next generation of broadcast technology to consumers.

Delany: The number of people taking the Foxtel HD iQ2 box has been around what we hoped. We are close to 10 percent penetration, which is around 125,000 customers.  I think we made the right decisions when we started out in terms of infrastructure costs. We started out with two sports HD channels, as well as two great channel brands, National Geographic and Discovery. We also had the BBC HD channel. We had a strong line-up of channels. The other thing we did which was very successful was offer PPV HD movies. We integrated this with the EPG so we had a really strong interface, then when you look at titles, you could see trailers and so on which worked fantastically to promote and the movies. We felt we had a good start-up strategy, from which to build on strongly. We are very satisfied with 10 percent penetration of HD.

Delany: That is a tricky question. Everyone has to adjust their strategy. It has been a challenging period. We have performed fairly strongly, as people have stayed at home and they have seen our product an exceptionally good value entertainment offering in harder times. It is hard to measure whether we would have had more subscribers if there had been better economic conditions. There is still a lot of consumer uncertainty about so we have to stay on our toes over the next period.
   

Delany: I think there is a real willingness on the part of producers now to go in HD. HD is rapidly becoming a standard thing. The fact is people want more channels in HD. You are right thought there is currently only so much fresh content bring produced in HD. However, any shortage will be over come because documentary producers, sports broadcasters and movie makers are all doing most of their production in HD. So I think you are going to see more and more content produced in HD. You will see broadcasters like the BBC ramp up their production in example, particularly when you consider things like digital switchover.

Delany: From our perspective, we have got more than enough going on right now. We have a big focus on more HD channels.. We will take a ‘wait-and-see’ approach to 3D. We are keeping up to speed with what is going on around the world. I think BSkyB is in a different spot to us. They are a little more advanced with what they doing with HD, as they have greater penetration for HD and PVR. I can understand why they are pushing ahead with this.