Netflix, Hulu, US iTunes… I want to be anywhere but here.

NetflixWhat happens to the New Zealand Internet when no one wants to be a part of it anymore?

We already have a number of New Zealand ISPs putting in place technology to make it look like their customers are connecting to streaming content from overseas.  There are people getting mates in the US to buy them iTunes vouchers there and then using those to purchase TV content not available on Apple’s New Zealand iTunes store.

As media companies attempt to retain their segmented-world distribution model what will the outcome be?  Will the New Zealand Internet become the worst address to have?  

At the moment, people are telling content providers “YOUR anachronistic business model isn’t MY problem” and striving to find ways to pay for timely access to the Internet delivered content they desire. Pay for.

It’s difficult to see if we’re winning the race here.  There are advances being made, and in some cases they are promising, but in many cases the report card reads a lot like one which many of us will have seen from our early school days.

“Your child has lots of potential.  Encouraging progress has been shown although there is still a lot of room for improvement.  Progress is slow and efforts need to be made to ensure that the potential is reached.” 

We’ve got Spark with their Lightbox product, and a recent announcement by Netflix that they are expecting to launch a New Zealand service early this year.  These are both great news, but only if in the short to medium term they deliver the same functionality as their non-New Zealand counterparts. We’ve had Quickflix for a while and Sky is launching its online-on-demand service this year too.

New Zealand Internet users care very little about ‘region-specific exclusive content licensing agreements’  they care very much about being able to watch Game of Thrones on the same day as the rest of their Facebook friends.  We don’t live in a world where you only talk about things with friends who live two blocks from your house.  If friends overseas are consuming content today, we now have an expectation that we can as well and are confused by arbitrary constraints which prevent us from doing so.

Over 30,000 New Zealanders are reported to have signed up to Netflix, many of them doing so through ISP based initiatives such as Slingshots’s GlobalMode.  While it’s unclear if any rules have been broken by these signups, at least one media outlet (The Australian) has been quick to label them ‘pirates’.  These people are actually the opposite of pirates, these tens of thousands who have NetFlix subscriptions this side of the world are choosing to pay for access to content through a legitimate channel rather than resorting to classical type of peer-to-peer file sharing.

Internet based consumers are willing to pay for access to content, they just aren’t willing to pay more than what they think it’s worth, wait an unacceptable time delay, or accept a degraded service.  The thing that seems to be missing in the minds of some content providers is an appreciation that it is these consumers who gets to decide when those lines have been crossed.

When evaluating a new service the average consumer asks themselves:

“Is this service worth the money?”

“Will it provide things in a timely manner?”

“Can I get access to everything I want? Or at least as much as my friends have?”

Using technologies such as geo-blocking to limit the services that a consumer can purchase is short-sighted. Technologies such as GlobalMode will continue to be developed which allow consumers to break free of these constraints.  

What are needed now are services which actually satisfy consumers’ requirements.

I would suggest that when New Zealand Internet consumers evaluate Spotify, Pandora, iTunes and similar music services they have found them to have passed this test.  

Anecdotal evidence seems to suggest that the prevalence of people pirating music using the Internet is shrinking nearly as fast as bricks and mortar CD stores.  The market has delivered a product which consumers want to buy, and they are… in massive numbers.

The report card however for Internet streaming of TV shows and Movies seems to be:

“Your product has lots of potential Encouraging progress has been shown although there is still a lot of room for improvement. Progress is slow and efforts need to be made to ensure that the potential is reached.”

Here's hoping that Lightbox and NZ Netflix rise to this challenge.