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Rancor Up as Netflix Streams Down Under

31 Mar, 2015 By: Erik Gruenwedel

Netflix Australia has only been operational since March 24 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.

Besides iiNet, Netflix has direct-access agreements with Optus, the second-largest telecom down under and Fetch TV — a pay-TV operator. But with streaming interest come infrastructure demands — the latter reportedly taxing the existing broadband ecosystem. That isn’t sitting well with some consumers.

"Uggggh Internet has been unusable the last few days. Yay for unmetered Netflix @iiNet but also thanks for the congestion," a disgruntled 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.

“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.

While significant numbers of broadband subs appreciate having access to Netflix and other SVOD services such as Presto and Stan, the burgeoning interest is underscored by two incentives: Free 30-day access to Netflix and iiNet isn’t charging (for now) Netflix streaming against subscriber monthly data caps.

As a result, the influx of streaming traffic reportedly is undermining the video through buffering, pauses and pixilation — issues that can undermine user loyalty, according to data tracking service Conviva. The company found just 25% of streamers continue to engage with compromised video content after 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 the snafus on the inadequate copper network operated by Telstra, Australia’s largest telecom.

"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 video download."

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 recent Aussie summer.

The rep said the 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 of video 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.

Indeed, in the United States, Netflix circumvented the issue by paying select ISPs added fees to ensure its subs smoother streaming.

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