While pay-per-view television has been offered for transmissions such as large international sporting events for several years, it is now starting to be made more widely available, and in direct competition to video stores, through Foxtel's iQ and Canberra-based telco TransACT.
In February this year, Foxtel released its version of a personal video recorder (PVR) called the iQ. It is designed to operate with Foxtel's digital television service, offering an onscreen EPG and the ability to pause, record and play back live Foxtel digital transmissions. The iQ unit also has storage space for around 60 hours worth of shows.
Using a rental model, Foxtel charges a one-off $295 access fee for subscribers to receive the iQ box, along with a $5.95 monthly subscription, which is waived for platinum package subscribers or those who subscribe for two or more set-top boxes.
There is also a $100 installation fee, but Foxtel says future upgrades and maintenance of the iQ box will be free.
Foxtel is also drawing on its stable of movie content to offer its Foxtel Box Office service to its subscribers. The pay-per-view service can be purchased using the iQ's remote control. The 'near video-on-demand' service offers content such as blockbuster movies starting as frequently as every half hour.
One ISP beginning to make inroads into the video-on-demand market is TransACT. In January, TransACT began offering video-on-demand to its customers via a set-top box that accesses its fibre-optic cable.
Through a deal with Singapore-based content aggregator Anytime, TransACT claims to have access to 20,000 movies from major Hollywood studios Fox, Universal, Sony Pictures and Warner Brothers.
Unlike Foxtel's Box Office, TransACT customers can stop, rewind and fast-forward movies.
Although TransACT's coverage only extends to the Canberra region, national carriers Telstra and Optus are also preparing video-on-demand offerings.
While broadcasters and ISPs jockey for position as the content providers of video-on-demand and other multimedia services to the home, IT resellers and retailers continue to tussle for the lucrative market in standalone digital devices.
The latest figures from the CDLI show that in the second half of 2004, Australians spent $1.1 billion on digital lifestyle products.
Digital cameras and audio devices were the number one and two sellers of the 10 device types monitored by the index.
Sales of digital cameras broke the half-million mark in the fourth quarter 2004 - just under 520,000 sales were recorded, for a total sales value of $222 million.
This coincided with the average price of digital cameras falling 19.2 percent ($101.33) compared to the same quarter a year earlier.
Digital audio devices were the second largest category, with Q4, 2004 spending of $99 million for 297,315 devices.
Interestingly, the CDLI showed two formerly popular categories begin to falter in the latter half of 2004. Gaming console sales fell compared to the previous year's Christmas period. Also down were digital camcorder sales.
For digital camcorders, with fourth quarter 2004 sales of 61,048, down from 72,000 sales in the final quarter of 2003, the report tipped that sales in this category may have peaked.
Games console sales of 340,000 units in Q4 were way below the 416,000 units recorded in the same quarter during 2003.
'Games consoles are a highly seasonal product, and the comparatively poor performance over the Christmas quarter this year will dismay manufacturers,' says GfK analyst Angus Macaskill.
'The current generation of games consoles is probably near saturation point, and sales will only recover when next generation models are released late next year.'
The growth in the portable audio category was also noted by research firm IDC, which predicts that 1.3 million MP3 players will ship by the end of the year, reaching almost 2.4 million units by 2009.
'The market for portable MP3 players started to experience phenomenal growth during the second half of 2004, achieving 126 percent and 135 percent growth in shipments units in the third and fourth quarter of 2004 respectively,' says research director Landry Fevre.
'Average selling prices for portable flash players will increase by 6.8 percent in 2005 because of the influence of the higher-end brands, such as Apple, Sony and Samsung pulling their weight and intensifying their marketing and promotion activities.
'However, cost per megabyte of flash memory is experiencing a downward trend and there will be fierce competition within the portable flash segment, with some brands offering portable flash players below $50.
'Declining average selling prices for portable flash players is unavoidable and they will start and continue to drop from 2006 onwards,' adds Fevre.
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