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Thursday, February 21, 2013

AFL TV Now! (for a fee)

By Lawyer Rob Clark

The decision by Telstra to sell an app that provides mobile broadcasts of AFL games live to mobile devices demonstrates the value of the rights that Telstra fought to defend against Optus in the TV Now litigation. But the question that remains is whether customers will be willing to pay for such services when their use may lead to eye-popping mobile phone bills.

Readers may remember the Optus TV Now service, which was shut down last year following a decision of the Full Federal Court and the subsequent refusal for leave to appeal by the High Court. Background is provided here and here and here.

In essence, Optus offered a service whereby users could record free-to-air television shows and then play them back on their mobile or other Internet-connected devices. In the case of iOS devices (for example, iPhones and iPads) users could play back television shows mere minutes after recording began, creating a near-live mobile television service. Telstra, along with the NRL and AFL, sued Optus for copyright infringement. While the first instance decision found that Optus did not infringe, the result of the Full Federal Court decision and refusal to allow appeal to the High Court was that Optus did infringe, and the TV Now service was shut down by Optus.

Telstra was a key player in the litigation, as it had recently paid $153 million for the digital rights to AFL broadcasts, giving it the exclusive right to provide AFL live matches online. Optus' offering, which was free and for which Optus did not pay Telstra anything, was a threat to this investment.

Interestingly, Telstra has now opened up their AFL mobile service to all mobile users, not only their customers, allowing Optus, Vodafone and other carrier customers to watch the AFL on their mobile devices after downloading a dedicated app. The key difference with the Optus TV Now service, apart from the broadcast being live rather than near live, is that the service will come at a significant price - $15 for a monthly pass and $90 for a season pass. 

While others can access the service, there remain benefits for customers of Telstra, in that they will not use up their monthly mobile data allowance watching AFL games. Optus offered a similar benefit with its TV Now service to its subscribers. Given the amount of bandwidth that video uses, this is an extremely important consideration for the viability of services like Telstra's AFL app. If customers may baulk at $15 a month, they'll certainly baulk at the bill from their carrier when they exceed their monthly data cap. Realistically, if customers of Optus, Vodafone and others really want to take advantage of Telstra's offering, they'll probably have to confine their watching to when they are connected to their home WiFi, or other free WiFi, which rather undermines the point of the 'mobile' service.

Telstra presumably believes that it can make more money out of offering this service to all mobile phone owners, rather than just its customers. It remains to be seen whether Australians are willing to pay $15 for a service which, if they are not on the Telstra network, is unlikely to be able to be used much outside their own homes (where they could watch it for free anyway via broadcast television) due to the high cost of mobile data. 

What the Optus TV Now litigation last year and this recent move by Telstra does show is that mobile television services, while not necessarily a replacement for free-to-air or pay television, are an increasingly lucrative means for delivering sports and other content, especially following the rollout of 4G networks. The question is whether the long term viability of mobile as a platform is being held back by the data charges of the very carriers that stand to benefit from the sale of such services.

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