Rancor Up as Netflix Streams Down Under


31 Mar, 2015 By: Erik Gruenwedel

Netflix Australia has been operational for about a week and response to the subscription streaming pioneer’s arrival depends on your point of contact (consumer vs. competitor) with the service. As expected, initial interest in the SVOD platform has been high, with Netflix accounting for 15% of iiNet Limited’s broadband traffic in its first two days of operation, according to Australia’s second-largest Internet service provider, with more than 1.3 million subscribers. In addition to iiNet, Netflix has direct-access agreements with Optus, the second-largest telecom down under, and Fetch TV — a first for a pay-TV operator down under. But with consumer interest come demands — the latter reportedly taxing existing broadband channels. “Uggggh Internet has been unusable the last few days. Yay for unmetered Netflix @iiNet but also thanks for the congestion,” a subscriber wrote on Twitter. Under Netflix’s deal, Fetch TV’s 170,000 broadband subscribers in Australia and New Zealand have direct access to the service via an app embedded in Fetch’s second-generation set-top boxes. Similarly to the other multichannel videoprogram distributors in the region, Netflix requires a separate AU$8.99 subscription. “Working with our ISP partners, iiNet, Optus and Dodo, Fetch TV has established itself as a disruptive force in the Australian entertainment market,” Fetch TV CEO Scott Lorson said in a statement. Indeed, while a significant number of broadband subs appreciate having access to Netflix and other Aussie SVODservices such as Presto and Stan, that interest is compounded by two facts: First-month admittance toNetflix (and other SVOD services) is free and iiNet isn’t charging (for now) subs for Netflix streamingagainst their monthly data caps. As a result, the influx of streaming reportedly is resulting in buffering, pauses and pixilation — issues that can undermine loyalty to a SVOD service, according to data tracking service Conviva. The company found just 25% of streamers continue to engage with compromised video content for more than four minutes. “We currently cannot stream Netflix whilst a playing PC game,” tweeted another disgruntled user. Still another iiNet sub wondered whether the influx of Netflix streamers had “clogged up the system.” iiNet CEO David Buckingham blamed Australia’s largest telecom, Telstra’s copper network, for the streaming issues. “We are having countless mass service disruptions on the Telstra copper network right now, so it might be people caught up in those who are commenting [on social media],” Buckingham told The Sydney Morning Herald. “Any technical issue would quite easily affect Netflix streaming, just like any other videodownload.” A Telstra representative told SMH the broadband disruptions were more likely caused by “higher-than-usual fault rates” due to unusual inclement weather during the Aussie summer. The rep said the telecom’s copper network is capable of handling SVOD streaming requirements, which now accounts for 30% of Telstra’s peak network traffic. “Each month there are more than 27.5 petabytes ofvideo traffic carried over our fixed network. That’s equivalent to watching more than 13 million hours of high-definition videos each month,” the rep said. Quickflix, Australia’s first SVOD and by-mail disc rental service, contends compromised video streams depend on individual ISPs. “There are huge differences in performance between ISPs — which tells us that this might be an ISP problem and not a general Internet backbone problem,” CEO Steve Langsford said. In the United States, Netflixcircumvented the issue by paying select ISPs additional fees to ensure smoother streaming access into subscriber homes.

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