Nick Tabakoff | July 31, 2008
JOHN Porter, the CEO of pay-TV operator Austar United Communications, has backed away from a full commitment to a next generation set-top box, saying it would only be launched if it could make money for the company.
Austar will in coming months embark on a spending program to develop a high-definition version of its MyStar digital video recorder, which would contain a USB port and an internet port -- along the lines of Foxtel's iQ2 box.After the company's half-year results briefing yesterday, Mr Porter conceded the company was "struggling" to find a financial model that would deliver new subscribers for Austar if it launched the product.
"We're looking for an investment that's going to pay back returns," he said. "But it's early in the cycle of HD, so I don't think we're going to win a lot of new customers because of it.
"If you're going to be compelled by HD, you're going to be compelled by 100 channels and you're going to be compelled by aDVR.
"It doesn't mean you're not going to be our subscriber because we don't offer HD if you're a technology person and you've got a nice big fat TV set and all that kind of stuff."
He has also played down the prospect of allowing video content from the internet to be accessed by the second half of next year. "Slowly we'll introduce HD and web-based services and those kind of things," he said. "But technology for technology's sake just because it's available -- we can't afford to do that sort of thing."
The comments contrasted with Mr Porter's stance on the box in May, when he talked up the prospects of a next generation MyStar driving the company into a future where DVRs were platform-agnostic.
He said at the time: "Our vision is to be the consumer interface for digital content, no matter which pipe it comes through: be it digital terrestrial TV, satellite or the web. It's about our box morphing into being a media centre for the TV set."
But Mr Porter said introducing such features immediately to MyStar could represent a "defensive" strategy implemented simply because of a fear of other boxes offering similar services.
"We're a smaller company, we don't have the need to be defensive, and we don't have the luxury of pursuing these things unless they deliver a fairly predictable return," he said.
Revelations by rival DVR TiVo's international head, Joshua Danovitz, in The Australian this week that it would allow users to download YouTube internet videoclips to the Australian version of the DVR box "free of charge" have not influenced Mr Porter's current thinking: "It's still the very pointy end of that sort of thing, and just because TiVo does something, it doesn't mean we have to rush into the breach."
Mr Porter said one outcome could be for Austar to develop the new box, and put it on the market in 2009 -- but not necessarily with a range of HD channels, as Foxtel has offered on its iQ2.
"We will develop the technology, and have the box available -- probably in the third quarter of next year -- and that may become our de facto DVR," he said. "It doesn't mean we'll be offering HD programming, but if we can find a way to do a smart deal with an HD program provider, then we'll do it."
However, he stressed he would only do deals with the program providers on commercial terms. "It boils down to shared risk."