This was the question posed by Hayden Glass for the May Moxie Session – an informal discussion group exploring internet issues. I was a speaker along with Rosalie Nelson from Chorus and Crown FIbre’s Rohan MacMahon.
The government’s fibre investment won’t pay off until large numbers of businesses and consumers sign for UFB services.
There are clear efficiency and productivity reasons for businesses to sign. We can assume most will get around to it before too long.
There are few obvious compelling reasons for most consumers to sign. Enthusiasts and gamers will want fast broadband, but for the mass of people, the draw card would be access to sport and entertainment. That’s something that can’t happen until Sky TV’s monopoly-like grip on TV is broken.
This is unlikely to happen without government intervention. The problem I see is that the fibre network exists in a policy vacuum, it doesn’t link to government broadcasting policy, business strategy, to health or to education. I called for the government to join up the policy silos, possibly by appointing a broadband supremo – someone who in US politics would be called the broadband Tsar.
Last week Coliseum Sports Media blew a hole through my argument. Instead of government intervention, a private business chipped the first hole in Sky’s monopoly. The company picked up the rights to English football (or soccer if you like). CSM will sell subscriptions – a year’s worth of English football – 380 games in total – for the price of a one-month subscription to Sky.
It’s a deal made for UFB.
Of course English football is a relatively minor sport in New Zealand. It ranks behind rugby, rugby league, cricket and netball, possibly behind motor sports. Sky has all those tied up – at least for the next two years. But we’re talking about the long-term here, the UFB project is still six years from completion.
It’s not just about sport. Although Sky has the movie studios tied up, it’s grip isn’t that tight. Every week a few more New Zealanders find ways to get around geo-blocking on media content so they can buy TV and films from Netflix or iTunes. At some point the movie studios will find it easier to cut international deals with digital distributors than to build a patchwork quilt of regional TV stations.
The question was will UFB transform New Zealand? I’m more confident it will. Households will sign to fibre broadband for sport and entertainment content – most of which will mean sending more money overseas – but they’ll stay for a raft of other services which will boost the economy and cut the cost of providing education, healthcare and other dealings with government.