Ten: online streaming about to get messy

TEN Network won't be joining the rush to set up a Netflix-style online streaming business, with chief executive Hamish McLennan warning things are about to get messy in the fledgling sector.
ONLINE streaming, or Streaming Video on Demand in industry jargon, is likely to take-off in 2015 with plenty of fanfare.
Nine and Fairfax are set to unveil a $100 million joint venture and Netflix is rumoured to be planning an entry into the Australian market, while Foxtel has entered the market with its Presto service and Seven West Media is in talks about setting up its own streaming platform.

Internet providers are getting in on the game as well; iiNet and Optus have partnered with Singapore-based Fetch TV and TPG has announced it will buy content from Foxtel to run on its own service.

The SVOD business model, which was pioneered by Netflix poses a threat to both Pay TV and Free-To-Air broadcasters by offering content on demand for significantly less than the cost of a pay TV subscription.

An estimated 200,000 Australians are reportedly already using Netflix, despite the company not officially being available here.

Mr McLennan says many companies are going to be burned as they try to establish a foothold in the market and Ten is happy sitting on the sidelines for now.

He said some companies would spend a lot of money and never see a return.

"I think its going to get messy for some players... they are going to spill a lot of blood over SVOD, commit a lot of resources to it and not succeed.

"We're just not going to rush into it... we're not going to commit huge amounts of capital just yet, we're just going to hold back and see how it plays out."

So far, the online streaming sector has not proven a money maker in Australia: the only listed provider, Quickflix, has accumulated losses of $52 million and had only 122,000 paying customers at the end of June.

Its share price has fallen from as high as 14 cents in 2012 to 0.7 cents.