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Wednesday, 15 February 2012 18:49

Kogan misses the point of digital TV assistance scheme


Governments are fair game for criticism, and those of a right-wing persuasion are understandably keen on bagging the present government. But it behooves them to get their facts right. Ruslan Kogan's ongoing campaign against the digital TV Household Assistance Scheme serves double-duty as a way of gaining free publicity for his company's low prices.

Ruslan Kogan, founder of online electronics and electricals retailer Kogan, isn't shy when there's an opportunity for publicity.

But his latest stunt - and it is hard to see it as anything else - shows a fundamental lack of understanding, apparently fuelled at least in part by the anti-government stance taken by some parts of the media.

In a press release, Mr Kogan echoes an implication made by The Australian (which can hardly be seen as a pro-government publication) that the digital TV set-top boxes delivered under the Household Assistance Scheme are costing an average of $698.

This shows a lack of understanding of the scheme, which is only available to maximum rate recipients of the Age Pension, Disability Support Pension, Carer Payment, or Department of Veterans' Affairs Service Pension or Income Support Supplement.

It is not so much about putting a $70 (or whatever the going price is) HD set-top box into the hands of these people. Even at the fairly modest pensions they receive, it's hard to imagine that paying $70 to be able to continue to receive existing TV stations - not to mention the additional digital channels - would be out of the question. Would you deliberately do without the extra channels just to make sure you qualified for a free box down the track? When you think about it, the people taking up the offer are likely to be those who knew or at least had good reason to suspect that they needed more than just a set-top box.

What's the scheme really about? Please read on.


The Scheme is more about looking after people who have a limited physical ability to install the box for themselves, or who live in areas with less than perfect reception. A quick look at the classifieds suggests local service providers charge $50 to $100 for installation.

Then there's the question of an antenna. You might be lucky and get away with the existing installation, but even in a metropolitan areas I've heard a fair proportion of people complaining they needed a new antenna when they bought a digital TV or set-top box. A complete replacement (antenna, cabling and wall plate) can easily cost $300, and substantially more if a tall mast is required. Remember that qualifying people who have purchased a new TV or a set-top box can opt into the scheme if they cannot receive all the SD channels available in their area.

So it's not hard to see a $500 bill, especially when ongoing support is factored in. But that's still well short of the $698 being bandied about. The difference presumably comes from the fact that the scheme extends to the provision of VAST satellite equipment to people who were previously served by analogue TV but cannot receive digital transmissions. And that's more expensive again, with a receiver and dish kit selling for around $600 excluding installation.

So while it may be true that "Kogan is able to sell a huge 55in LED TV, with a built-in set-top box and personal video recorder, and a 5 star energy rating for under $700", it's neither here nor there. A new TV won't do a pensioner any good if their antenna and cabling isn't up to the job, and a built-in PVR is (as I understand it) a waste of money with VAST, as that function needs to be in the receiver not the TV.

So I'm left wondering whether Kogan actually tendered to be a provider under the scheme. I suspect not, because the company is basically a box mover. That's fine for some things (I recently purchased a vacuum cleaner from Kogan), but not when full service is required. "[U]nlimited phone and email support" is no substitute for installing a new antenna or a satellite receiver and dish.

It may be true that the box(es) selected for the scheme are far from being the cheapest, but the criteria reportedly included suitability for use by pensioners who may have some physical limitations. Even if Kogan couldn't provide a stand-alone bid, did it offer its set-top boxes to companies that could handle the installation, and if so, were they judged suitable for the beneficiaries of the scheme?

Page 3: Let's lift public debate out of the gutter.


As for Mr Kogan's assertion that "Kogan can sell a 55in LED TV with built in set-top box for the same price that the government is sourcing just a small box," it's probably safest to assume he is misinformed, because the average cost per household is very different to the price paid for the box.

And his closing remark that "The government needs to recognise that it isn't an expert at everything. On some things, like technology products, it's often best to leave the job to technology experts rather than going it alone", was just laughable, because that's exactly what the government did - it let the contracts to specialists that can deliver the full service.

I realise that by writing this I have played into Kogan's hands by giving the company free publicity, but we need raise the level of public discourse in Australia from catchphrases (dog whistles?) and rabble-rousing (eg, Mr Kogan's assertion of "gross misuse of tax payer money and government incompetence") to rational and informed debate.

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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