Telco makes move on ‘Netflix fatigue’
2degrees has made its first significant move into the internet television market, offering Amazon Prime Video free for a year to new customers who sign up to unlimited broadband plans and to existing unlimited broadband customers who ask for it.
2degrees chief consumer officer Scott Taylor said the telecommunications company had also held initial discussions with Spark about wholesaling its Spark Sport service, which is due to launch later this month.
Taylor said he believed from those talks that Spark had a genuine willingness to enter into such arrangements.
‘‘We are very open to doing a deal with them if the commercials stack up.’’
2degrees, which has about
78,000 broadband customers, had done a lot of research into the role of content in consumers’ purchasing decisions, he said.
‘‘While it is not the prime reason someone chooses their broadband or mobile provider, it is the icing on the cake and it does help seal the deal,’’ he said.
Internet providers can buy broadband connections from wholesalers at the same price, regardless of their size.
The upshot has been that dozens of small internet providers have been able to compete with larger retailers such as Spark, Vodafone and Vocus.
Taylor said he was not concerned ‘‘at this stage’’ that market dynamic might change as a result of any expectation from consumers that internet providers should also bundle internet television for free.
Amazon Prime Video normally costs US$5.99 a month in New Zealand and as of November offered a catalogue of 416 television shows and 4321 movies.
Although Netflix is the largest internet pay-television provider in New Zealand in terms of subscriber numbers, Taylor believed consumers were experiencing a little bit of ‘‘Netflix fatigue’’ that could make Amazon a canny partner.
2degrees at one time resold Sky’s Neon entertainment service, but Taylor described that as a ‘‘token’’ initiative.
‘‘This is our first true teamingup around content. Up until now we haven’t really needed to have a content offering – we have just focused on offering great-value and good-service broadband.’’
2degrees will also be hoping the non-exclusive partnership with Amazon will promote awareness of its broadband offering. Taylor said its research showed only a third of Kiwis knew 2degrees offered broadband in addition to its mobile service.
The company has also promised to freeze its broadband prices this year.
That contrasted with Spark and Slingshot, which raised their prices for copper broadband late last year. It also contrasted with Vodafone, which in February announced an across-the-board $3 price rise, Taylor said.
‘‘Up until now we haven’t really needed to have a content offering.’’ Scott Taylor of 2degrees