With the pay TV market contracting it is essential for the companies involved to cut costs, as growth is no longer available to them. Consolidation therefore makes sense especially as FOXTEL and AUSTAR are not really in competition with each other. However, pay TV is no longer the main game as digital TV and IPTV are becoming available. With the traditional telecoms market also in decline the telcos and ISPs are moving towards video based applications and the IPTV model is after a slow start finally taking off now better quality broadband is becoming available.
Any decisions regarding the merger therefore does need to take into account what effect this will have on the available of content and the level of competition that will be available in this market after the merger. Obviously with the knowledge that IPTV will become a major competitive platform for content the regulator needs to ensure that a pay TV content monopoly doesn’t stop this new development.
Recent outcry in the press in relation to set-top boxes has also brought this issue back on the political agenda and the TIO has indicated that it needs to be considered that the pay TV set top needs to be brought under the regulation that applies to STB services provided by telecoms companies.