Simon Moutter says the new name denotes change. Photo / Dean Purcell 2 Telecoms other big announcement yesterday - its planned internet television service called ShowmeTV - of course came with risks, Moutter said. If we perform poorly and dont get many customers to watch well be under water thats for sure, he said. Asked how ShowmeTV would avoid becoming another QuickFlix, an online content service which is criticised for its lack of quality content, Moutter said: We have enormous marketing reach, we have relationships with millions of New Zealanders already, we have a distribution capability and a marketing capability that is vastly superior to a QuickFlix. Well be resourcing the quality of that content library to a level that is substantiality superior, he said of ShowmeTV, which will launch in the coming months. Moutter said the Telecom venture was not directly challenging Sky Television, which has a near-monopoly on pay television in New Zealand. From around the world, we see these new content offerings taken really as a complementary offer to more linear-orientated or channel-structured pay or free TV. We see [ShowmeTV] as potentially very complementary and offering a new style of viewing with a new package of content which many people will take in addition, Moutter said. Sky Television chief executive John Fellet said he had heard that Telecom was planning a subscription video on demand (Svod) service, similar to Netflix, and such services tended to be complementary to pay television businesses such as Sky TV, rather than taking customers away. Netflix I think has 40 million subscribers in the US and the US hasnt lost any pay TV subscribers, he said. And 80 per cent of all the Netflix subscribers in the UK also take [pay TV service] BSkyB. I dont [know] whether this service will look like Netflix so its tough for me to draw a conclusion, but around the world the typical Svod services tend to be more complementary to full-scale services like Sky. Asked how he rated Telecoms chances in securing the high-quality content ShowmeTV would require to succeed, Fellet said: Its a pretty open market out there so if youve got a big enough cheque book and want to have a go at it getting the content is one step and trying to advertise it is another. Moutter said Telecom would be budgeting $20 million in the next financial year for ShowmeTV. About 75 per cent of this would be for operating costs, mostly for buying content. Fellet said $20 million sounded like a sufficient pool of capital to get such a venture off the ground. Name-change gamble sparks some misgivings Telecoms plan to change its name to Spark is a big gamble, but it could help do away with the telcos old fuddy duddy brand image, a marketing expert says. University of Auckland senior marketing lecturer Mike Lee said one of Telecoms greatest strengths was its reputation as an established brand. So for anyone coming in from overseas or other businesses that might be coming into New Zealand, Spark is going to pretty much - on the perceptual mind map - put them right next to Woosh or Slingshot or any of those more dynamic, smaller brands, rather than Vodafone, which is internationally known, he said. They were established and old fashioned, but that was also one of their greatest strengths, in my opinion. Lee said the name change suggested Telecom had decided the older generation of consumers would not remain profitable for much longer. So theyre trying to capture that younger generation as people leave school and Spark, being a more dynamic name, may be more appealing to them, he said. The older generation probably wont be affected too much because effectively, in such a small market, people will just stay put [with Telecom] ... But it is a big gamble and it is a big change. Lee said it was positive that Telecom had made a lot of changes within its business, such as its split from Chorus, before the name change. Whereas usually companies change their name and their logo and then dont do any business changes - that to me is a sort of slap of fresh paint approach. Technology adviser and entrepreneur Lance Wiggs said it was hard to know whether the name change was serious. What is Telecom? Telecom is a telco. Its reliability, its size and its history combine to give us confidence that it can be trusted with our data and mobile phones and so forth and changing its name from something which has the solidity of Telecom to something with the ridiculousness of Spark to me is a giant step in the wrong direction. Its taking away all the brand value that theyve got. Wiggs said the name change was a distraction from the changes going on at Telecom. Air New Zealand didnt change their name on their transformational journey so why should Telecom? Peter Griffin of the Science Media Centre said although he understood why Telecom wanted to appear different, he believed that abandoning that well-respected name was a mistake. Christopher Adams, Hamish Fletcher - NZ Herald
Posted on: Fri, 21 Feb 2014 21:37:47 +0000
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