Lightbox not offering enough to lure viewers

TELECOM hasn’t yet launched its internet television service, Lightbox, but one analyst is already forecasting it may have to sweeten its offer to get traction.

Forsyth Barr analyst Blair Galpin said in a broker report that he expected Telecom would come under pressure to cut the price of Lightbox, offer it unmetered to Xtra customers and to provide sports content in addition to movies.

Telecom announced last week that it would launch the subscription video-on-demand (SVOD) service ‘‘within weeks’’.

It will initially offer 5000 hours of television programmes, including series Vikings, Mad Men and 24, and will cost $15 a month.

Telecom broadband customers will be given an undisclosed discount.

Forsyth Barr remained downbeat on Telecom’s prospects more generally, retaining its ‘‘underperform’’ rating for Telecom shares which it values at $2.40, an 11 per cent discount to its current share price.

The broker said rival Australianbased SVOD service Quickflix also offered New Zealand subscribers 5000 hours of content, for $12.99 a month.

Quickflix announced yesterday that it had acquired SVOD rights from South Pacific Pictures for 120 hours of New Zealand dramas, including Go Girls and Outrageous Fortune.

Galpin said Netflix provided about 6400 movies and 1580 television series. About 30,000 New Zealanders are believed to have subscribed to Netflix, which costs US$8.99 (NZ$10.24) a month, even though that is against the United States company’s terms and conditions.

Sky Television will launch its own SVOD service before Christmas. It and Telecom have different views on whether the increased activity could dissuade Netflix from acquiring the programming rights it needs to formally enter the New Zealand market.

Sky TV spokeswoman Kirsty Way said Sky was operating on the assumption Netflix would enter the New Zealand market ‘‘one day’’. However, Telecom spokesman Andrew Pirie has speculated that if locally developed SVOD services prove a hit, Netflix might not bother.

Neither company would comment on whether they had seen Netflix bid against them for the rights to stream any programmes over the internet in New Zealand.