Foxtel has commissioned a new iQ3 set-top box and will progressively fix bugs in existing units as the subscription television business prepares to add super-fast broadband to its bundles.
The new iQ3 box will see an update to the unit’s processing speed as well as significant cost reduction to Foxtel. However, a release date has not been finalised.
“Basically, we have commissioned a new iQ3 version set-top, iQ3.5 if you like, that has all the same functionality of the existing box, but it has a processor speed which is significantly faster just with the advent of new chip sets, it’s a naturally faster box and it’s a significantly lower cost,” Foxtel chief executive Peter Tonagh told The Australian Financial Review.
“We’ll port the existing middleware, or software, across from the iQ3 to the new box. In doing that, it will perform better, just because of the high-speed processor, but it will be lower cost to us, which is obviously a good benefit.”
Foxtel, under Mr Tonagh, is increasing its investment in local content, sporting rights and technology platforms.
Problems with the iQ3 box was one of Mr Tonagh’s key issues to address in his first 100 days in the top job at Foxtel, which is 50-50 owned by Telstra and News Corporation.
“The iQ3 is a box that has immense advocacy from a large group of customers and a lot of detractors on the other side,” Mr Tonagh said.
Some customers have at times complained about problems such as picture and menus disappearing, frozen screens, recording problems and remote-control latency issues.
“What we’ve been doing is basically working through systematically each of the bugs that we’ve identified. We’ve now got code that addresses a very large number of bugs within the box and providing we go through our early sign-off of that next week it’ll start rolling out within the next two weeks and progressively across the entire base and should lead to significant improvement for the people who have had bad experiences.”
Following the rollout of the software bug fixes, over the coming weeks, Foxtel will begin an aggressive marketing push for the iQ3, which it quietly stopped marketing earlier this year, to later be complemented by the launch of Foxtel NBN connections. The business launched its original broadband bundles in early 2015.
Mr Tonagh brought Mark Buckman, a former marketing executive Telstra and the Commonwealth Bank, to lead the Foxtel’s marketing and sales functions.
“We will push harder on the broadband bundles. We haven’t yet launch Foxtel-NBN connectivity, we’re launching NBN connectivity in the new couple of months and once we do that we’ll go harder with the bundle with the iQ3 and the Foxtel Hub which is our broadband router,” Mr Tonagh said.
“The two of them are designed to work well together and we think a good opportunity for us to more aggressively push into that broadband space … We’re comfortable with our NBN launch that we’ll have attractive pricing.”
Foxtel, which had approximately 2.9 million subscribers as of March 31, is also planning to release a so-called “puck” streaming device to provide a cheaper entry point for prospective customers who may not want to pay for the high-end iQ3 box.
Third party services
Foxtel’s smaller rival, Fetch TV, released two new set-top boxes in June, a puck-like Mini and the third generation of its personal video recorder, the Mighty, after renewing key telecommunications partnerships with Optus and Dodo. While iiNet stopped sales of Fetch last August, then quietly resumed call centre only sales, it appears to once again be selling the service online. Foxtel shareholder Telstra also launched its own puck device, the Telstra TV, last year, which at present does not enable users to stream Foxtel.
It is understood that Foxtel is open to third party services being available on the puck, such as Netflix, Stan, Presto and free-to-air catch-up services, which is speculated to be manufactured by iQ3 supplier Arris.
“We still have a view that the best way to deliver very high quality broadcast signals, particularly in linear channels, is via satellite, high-definition satellite, supplemented by broadband for on-demand content,” Mr Tonagh said.
“But, for people who don’t want to pay, or have an issue in paying for a more expensive set-top box with more functionality and paying for somebody to go in and install it, then we’re very committed to delivering them an option where they can basically go into a retail store, or call us up and have an IP [internet protocol] puck device delivered, self install it and get access immediately to all the same programming that they can get in the iQ3 for example.”