Video content is likely to be a major driver in consumer uptake of the Ultra Fast Broadband network, but New Zealand is behind overseas markets in developing over the top (OTT) content, says a Commerce Commission study.

The Commission has today released its third issues paper on the demand side of high speed broadband networks, looking at content, applications and willingness to pay. It features a Roy Morgan survey of consumers in which respondents expressed the most interest in receiving video and movie content via the internet.

The survey also shows most consumers were reluctant to pay an additional $10 per month for a high speed connection.

"Ultimately, consumer willingness to pay a greater amount for high speed broadband services will depend on the attractiveness of content and applications which are offered", says telecommunications commissioner Ross Patterson.

The report notes that internationally telcos are using high speed broadband to deliver "triple play bundles that include video services as a core component, [and] the New Zealand market is falling behind."

"Video delivering over IP has the potential to change the shape of the video content sector. Overseas, new players are using high speed broadband connectivity to enter the video content sector and deliver new services," the report says.

It says there is no "content differentiation in the New Zealand market", noting that Orcon is the only major ISP not to resell Sky TV content.

"Currently most bundled services in New Zealand resell Sky content for the video part of the bundle. Differentiated triple play services could potentially emerge as high speed broadband networks are deployed," the report says.

"The emergence of these services will depend on parties' ability to access premium content."

The report cites the Computerworld's article in which Netflix vice president of product innovation Brent Ayrey told the ITEX conference in November last year that it had no plans to launch in New Zealand, citing poor broadband connectivity and content issues.

The report has been released in the run up to the Commission's conference on February 20 and 21 in Auckland which will consider issues raised in this report, a paper looking e-health and e-learning, and another examining technical issues.

Fairfax announces Stuff.co.nz TV

The Commission's report has been released on the same day as Fairfax NZ has announced the launch of Stuff IPTV Channel on Sony Internet TVs, with a video streaming news service.

Fairfax Digital general manager Nigel Tutt says the initial focus will be on national and world news and sport. He says the Stuff Channel on Sony Internet Television extends the video content developed by Fairfax's journalists around the country right onto internet-enabled TVs.

"In the period from December 2010 to December 2011 we had on average over one million video views per month on stuff.co.nz. This shows that our customers have a great appetite for visually compelling news, and as internet-enabled TVs become more prevalent, the ability to access quality local and international content right in their living rooms will be attractive."

Fairfax is the publisher of Computerworld in New Zealand.