Keith Newman does the research and reckons accelerating internet speeds and streaming content are transforming our TV, movie viewing and online surfing habits.

The digital pipedream of blazing internet speeds and instant access to a gazillion hours of eye candy is edging closer to reality with 2015 likely to be the year of on-demand binge viewing and the death knell for the dreaded data cap.

The monopoly of traditional broadcast and pay TV providers is under severe challenge with several legitimate, high definition content platforms now streaming direct to smart and not so smart TVs, gaming consoles, PCs, laptops, tablets and mobile phones.

In preparation for this long-awaited entertainment explosion, Internet service providers (ISPs), facing stiffer competition than ever, are reinventing themselves as utility strength telcos with all you can eat premium accounts including voice, free national calling and mobile options.

Just five years ago, most of us had internet access speeds of 2-4Mbit/sec, data caps were in the low gigabytes and there were penalties for exceeding the limit; online catch-up TV was in its infancy and movies were a step too far.

Chorus, the nation’s main infrastructure provider and wholesaler, noted that average internet consumption rocketed from 4-19Gb a month to 41Gb in the four years to mid-2014.

A quick glance at the domestic usage meter at Hawke’s Bay telco NOW confirms we’re right up there. Between Nov 2012 and 2014 Internet usage nearly trebled from 22Gb to 61Gb, well over the national average and growing 10% month on month.

NOW CEO Hamish White says demand-based services and the “internet of things”, where almost everything’s connected to everything else, are making premium broadband accounts including fibre optic connections extremely attractive.
“Go into any household in the evening now and everyone’s on Facebook and YouTube and streaming movies on the TV.”

A key factor is widespread use of wireless devices in the home. “Just about every member of the family is on a wireless device so you are no longer tethered to a household computer.”

Content contenders

While network gaming, a growth in online shopping, social media, sharing photos and videos, posting selfies and constant ‘cloud back-up’ are factors, it’s the online content revolution that’s gobbling the gigabytes.

Although TVNZ pioneered on-demand streaming back in 2007 and TV3 followed suit, a new breed of non-broadcasters are pushing the global envelope and a handful are now jockeying for position in New Zealand with packages costing $15-$20 a month.

Australian streaming company Quickflix launched here in March 2012 with old and new TV shows and movies plus pay-per-view for newer films, although it will have to become more compelling to ward off better resourced rivals.

Spark’s Lightbox went live in August 2014 with a goal of reaching over 70,000 customers by June this year. It has over 5000 hours of TV but ensured mass take-up when it offered 12 months free access to its 600,000 broadband customers.

That pre-emptive move was clearly designed to take the shine off Sky TV’s Neon service now offering 4500 hours of TV plus movies also being offered free to existing subscribers and for $20 a month to non-Sky users.

Vodafone and NOW jumped on that bandwagon offering unlimited account holders free Neon access for a period. Sky also announced season passes for specific shows and its FanPass sports streaming service which is up against arch-rival Coliseum.

The arrival of world leading streamer and content creator Netflix at the end of March means there are now four serious contenders alongside the main broadcasters and their catch-up and off-schedule shows.

Netflix originally rejected New Zealand because of our poor broadband and content restraints, but its massive stable of TV shows and movies confirms Internet streaming as a mainstream delivery mechanism.

Popping performance caps

Extending fibre optic cable to local exchanges and neighbourhoods has supercharged copper line capability and made fibre to the home, from 30Mbit to 100Mbit/sec, the fastest growing Internet connection, potentially rivalling copper within four years, according to StatisticsNZ.

Akamai suggests our average broadband speed for the September 2014 quarter was 7Mbit/sec (megabits per second) a 37% increase over the previous year with only 14% achieving more than 10Mbit/sec. Rival researcher TrueNet has a more positive spin, claiming average speeds had improved 34% to 14Mbit/sec.

Of course by the law of averages those powering along at lightspeed tend to skew the focus away from the many who’re still on post dial-up speeds trying to get off the dirt road onto the main highway.

There’s still some distance to travel to fulfil the Government’s promise of 75% of the population having access to Ultrafast broadband by 2020 although our escalating appetite for online content and services is tangible evidence it can’t come too soon.

If an average movie gobbles about 1.2Gb and an hour of streaming a day consumes about 70Gb per month, even 100Gb data caps already pose severe limitations for entry into this new digital frontier.

Over half of all Kiwi internet subscribers are already adopting premium accounts with unlimited access plus phone line and free national calling for around $90-$100 a month.

Quality of service

The focus on content, network speed and gigabit consumption inevitably leads to the issue of quality of service rather than the current best effort approach, and a growing demand for hands-on technical service to ensure multiple devices can operate optimally on a home network.

Constant buffering, sound degradation and image stuttering are unacceptable, whether caused by line congestion, weather, distance from the wireless router or just bad service.

Consumer NZ’s latest report card makes it clear the ‘service’ part of Internet service providers is still sadly lacking for many customers. The big players Spark and Vodafone were below average in most categories, and worse than last year.

Overall ISP satisfaction, a reflection of connection reliability and speed, was 68%, down from 74% last survey. Over half of Internet customers occasionally experienced disconnections and drop outs, 15% of them regularly.

A big selling point for NOW, with over 7,000 customers in Hawke’s Bay, is having Akamai’s caching servers in Napier to improve quality and speed of access, particularly content streaming, and their policy of having their own field technicians on the road.

They’re flat out troubleshooting issues arising from the increasingly complicated mix of home technology, including updating routers and adding wireless access points to improve coverage.

“Broadband is only as fast as the narrowest points, routers are letting people down with black spots in the bedroom or deck while access points are struggling to simultaneously cope with more than one user,” says White.

Antidote to anarchy?

Despite the arrival of approved streaming services the digital genie has been out of the bottle for a several years despite all the concern about piracy and copyright violation.

The same generation that found workarounds for DVD country codes has also bypassed streaming content geo-codes.TV as the baby boomers knew it is an outdated model; they’re already watching movies and TV series before they’re broadcast or at DVD rental outlets.

Colmar Brunton in its 2014 youth trends survey (16-29-year olds), reveals half of young Kiwis admitted ‘unauthorised’ streaming of TV programmes and a third were downloading movies; a quarter of them regularly.

And they’re not necessarily using the peer-to-peer file sharing that put a rocket up the music industry forcing it to offer legitimate alternatives but acquiring vouchers, a US credit card or spoofing access to international subscription services including Netflix, Hulu, Amazon Prime, Apple TV and iTunes.

That approach is now being facilitated by providers like Slingshot and Orcon using the Global Mode international solution to enable Kiwis to ‘legally’ log-on to offshore streaming sites that might otherwise be geo-blocked.

Web developer Matthew Denard, “a refugee from Christchurch” now living and working in Napier, changed to an unlimited account with NOW after struggling with the limitations of an ISP with a 100Gb cap, and $2.50 per Gb penalty thereafter.

Denard and his partner regularly use YouTube and the Unotelly.com redirection site, which unblocks access to BBC iPlayer, Netflix.com, US mega-site Hulu and other content sites. They’ve more than doubled their streaming consumption in the past year, have reduced their SkyTV account and may even dump it altogether.

Expanding digital universe

While Internet users are rapidly migrating to fibre (about 60,000 to date), thousands of mobile users are also stepping up to next generation 4G technology, which is 10 times faster than its predecessor with phones optimised for streaming HD content.

Concurrently there’s massive repositioning of international Internet capability. The Southern Cross Cable linking New Zealand to the rest of the world is ramping up to 100Gbit/sec speeds with overall capacity to support 12 terabytes per second.

Reality check? That’s the ability to stream over 700,000 Ultra HD videos simultaneously or download 180 million Blu-Ray discs a month.

Just to be sure we can cope, Spark, Vodafone and Telstra have committed to a competing second international cable which will also act as a kind of emergency back-up if the Southern Cross goes down. This could be operational by mid-2016.

In November last year InternetNZ was “bemused” the chief censor was considering prosecuting Slingshot over its use of Global Mode. Its sage advice was, ISPs are not technically responsible for what their customers do and the courts haven’t determined it’s illegal.

In an increasingly borderless world, said InternetNZ CEO Jordan Carter, the censor would be better off starting a conversation about how to deal with censorship issues in the digital age, rather than trying to limit the reach of the Internet.

The first of the new wave of ‘legitimate’ streaming at least attempts to counter the anarchy perpetuated by those with voracious appetites for geographically restricted content, but in reality the content revolution is only just gathering momentum.

As NOW CEO Hamish White says, streaming is already threatening the conventional DVD library in the same way online offerings challenged music outlets from 2006. “Music shops have virtually ceased to exist — the whole industry was displaced.”

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