Australia's Fetch TV has entered a strong growth phase, and is likely to end March with more than 200,000 subscribers.

The company and its partners are experiencing significant growth on the back of aggressive bundling with high-speed broadband, after commencing a new marketing push for the service a year ago.

Fetch TV wholesales a turnkey IPTV offering, provided by a hybrid set-top box, to internet service providers (ISPs).

Partners include Singtel Optus, iiNet and M2, respectively the second, third and fifth largest players in Australia’s high-speed internet market.

Overall, the service is now sold by eight of the top ten retail broadband brands in Australia, representing about 45% of the country’s broadband market.

With a business model heavily reliant on ISPs for customer facing activities, including sales, service and billing, Fetch TV has already turned profitable and is debt free.

A new deal, which will see integration with Netflix’s subscription video-on-demand (SVOD) service, is another vital part of the ecosystem which Fetch TV caters to, says CEO Scott Lorson.

“We are very much an open ecosystem,” Lorson tells Media Business Asia.

"We are not a traditional pay-TV walled garden, and therefore we actively pursue partnerships with the likes of Netflix, YouTube, etcetera."

In the case of Netflix, SVOD was not a place where Fetch wanted to play. “A partnership with the clear market leader made sense,” Lorson says.

“We see ourselves as a full-service supermarket, we simply decided to leverage the third party to provide the butcher," he explains. "Something that would have been very bloody for us to do ourselves – pun intended."

BROADBAND BATTLEFIELD

Netflix launches in Australia next month, competing with pay-TV colossus Foxtel (which ended last year with 2.7 million subs) alongside free TV broadcasters Seven, Nine and Ten, as well as SVOD offerings such as Presto (Foxtel, in partnership with Seven) and Stan (Nine, in partnership with Ten).

Such moves are a wider part of a broadband battleground, where entertainment-led bundled offerings are becoming the norm.

Fetch’s IPTV offering gives telcos such as Optus and iiNet skin in the video game, allowing them to disrupt and steal customers away from established rivals and fully capitalize on the buildout of Australia’s National Broadband Network (NBN).

Fetch’s content and channels are hard-bundled with the telcos’ data offering, although subscribers have to pay for additional services, such as transaction VOD (TVOD).

Fetch’s TVOD services has over 4,000 titles, supported by all the Hollywood studios. Fetch TV will expand the service to include a buy option (electronic sell through) next quarter, benefiting from early release windows in the process.

“Take-up of Fetch TV at this stage is very much a push proposition,” Lorson says.

“Customers see it as a gift with purchase when buying a broadband triple-play bundle that is marketed as a single price point,” he explains.

“We see potential for the service to become a traditional pull proposition that generates its own demand, once awareness grows and with strong advocacy from a scaled customer base.”

Foxtel's Moves

Earlier this month, Foxtel announced prices for its triple-play bundles through its tie-up with 50% shareholder Telstra, Australia’s incumbent telco.

Essentially, new Foxtel promoted services are bundling unlimited domestic calls with 200 GB of data and access to Foxtel’s basic entertainment and sports channel packs for A$130 (US$102) a month.

Optus and iiNet offerings, bundled with Fetch TV, cost customers A$90 a month, with Fetch TV’s hypothetical value hovering around A$30 a month.

Foxtel also reduced entry pricing for its pay-TV packages towards the end of last year, acquiring more than 50,000 new subs since the move.

At present, Fetch TV is carrying content from most channels offered by the likes of the BBC, Disney, ESPN, National Geographic Channel, Universal and Viacom.

Turner content could become available when existing exclusivity agreements expire next year. Fetch TV exited its relationship with Discovery last month.

The company's time-shifting functionality is a key driver, with customers recording an average of 120 shows a month from terrestrial TV networks, along with high usage of free TV’s catch-up services, also integrated with Fetch.

As the company starts to build on its cash position in Australia, new moves are likely to take shape, with a technology partnership in  Malaysia within the next month, and wholesale agreements in other Southeast Asia markets further down the line.