Broadband eats cable

Have you ever wondered what it would be like to run Foxtel? Until recently, the 10 year old Australian cable network hadn’t even turned a profit. It’s competitively hobbled by its joint ownership by Telstra, News Ltd and PBL, and now it’s woken up to the reality of the Internet.

Foxtel chief executive Kim Williams has rolled out this sob story as it becomes apparent that broadband usage has surged past cable TV:

In Australia, the number of subscribers for pay TV grew by 6.3 per cent to 1.69 million last year, while broadband customer numbers surged more than 80 per cent to 1.67 million.

What amuses me is Foxtel’s belief that government regulation of content on the internet – Australian sporting events in particular – will help appease its ills. Then you’ve got this bizzare notion implicit in the story that Foxtel must somehow compete with "broadband," which is clearly not a company or entity one does battle with in the traditional notion of competition. Mr Williams at least has one thing right: Foxtel’s content will continue to struggle (some might say in vein) against content freely distributed over the internet, which by definition will never succumb to regional interests.