Foxtel takes the fight up to Netflix and Stan
Foxtel MD customer and retail Mark Buckman at the Foxtel Now launch. (Photo: Ben Symons)
Foxtel has rebranded itself and relaunched and re-named its Internet-delivered streaming service in a bold move to combat competition from Netflix’s Australian service and Stan.
Foxtel Now replaces Foxtel Play, a repositioning hailed by Foxtel CEO Peter Tonagh as the biggest strategic shift in the Australian pay-TV company’s 22 year history.
A massive media campaign will start on Sunday, targeting the 2 million-plus Australians who subscribe to Netflix and/or Stan and who Foxtel believes are prepared to pay $10-$50 per month for pay channels and an on-demand library.
The theme is ‘Foxtel for Everyone,’ which Tonagh said reflects the transformation of Foxtel from being the pay-TV provider for the premium segment to the premium entertainment provider for all Australians.
“We are staking out a space where we have not been before,” he told a media briefing yesterday at the Sydney Cricket Ground.
“We are reinventing ourselves, playing to our traditional strengths which are live Australian sport, premium international drama, movies, lifestyle programming and original Australian productions.”
Foxtel spends more than $100 million a year out of its total content spend of $1.6 billion on local productions.
That excludes news and sport and co-ventures such as See-Saw Films’ Top of the Lake: China Girl, a collaboration with BBC First. The miniseries directed by Jane Campion and Ariel Kleiman, which had its world premiere at the Cannes Film Festival, will debut in Oz in late August.
Foxtel Play launched four years ago but had not been aggressively promoted by Foxtel, which axed Presto, its loss-making SVOD co-venture with Seven West Media, last January.
Tonagh noted Foxtel’s household penetration had been stuck at 30 per cent for several years and that nearly half of Foxtel’s 2.9 million customers have been subscribing for 10 years or more.
That implies a high degree of brand loyalty among the older demographics but a large, untapped and mostly younger audience.
The marketing campaign for Foxtel Now conceived by TBWA and co-produced with Foxtel’s in-house team Felix recognises that it is increasingly individuals rather than households who make pay-TV purchasing decisions.
The company co-owned by News Corp. and telco Telstra has committed to spend an extra $1 billion on acquiring content rights, technology and customer service over the next five years, above what was planned last year.
The pricing for Foxtel Now will not change, with starter packs at $10 per month, plus $15 each for the drama and Pop drama/comedy packs (which will include season seven of Game of Thrones and all previous series). The movies pack costs $20, sport is $29 and lifestyle, docos and kids are $10 each.
At launch there are more than 16,000 titles in the on-demand library, half of them in HD.
The service will be available on PC/Mac via the Google Chrome browser, Telstra TV, iOS and Android mobiles and tablets and Chromecast, with other devices to be added.
Tonagh observed that Netflix and Stan (co-owned by Nine Entertainment and Fairfax Media) are looking at raising their fees because their current pricing model is not sustainable.
Foxtel will soon introduce a ‘puck’ streaming device, which will retail for about $100 and include a free-to-air tuner and the FTA channels’ catch-up platforms. He hopes either or both Netflix and Stan will make their services available.
Transactional VOD will be added later as will the company’s first move into electronic sell-through.
The new Foxtel logo is in lower case, ditching the traditional caps format which Tonagh acknowledged was “quite aggressive, arrogant and elitist.”
Mark Buckman, MD of customer and retail, described the previous logo as “masculine and shouty” and the new one as witty, simple and fun.
Buckman said the new campaign aims to position Foxtel as a service that is accessible and affordable for everyone, “not just the privileged few.”
Tonagh stressed Foxtel’s superior movie offerings, noting that 98 of the top 100 movies in the US last year were available on its platform, versus no more than 30 on Netflix and Stan.
More than 3,500 titles were screened across Foxtel’s 11 movie channels last year. The introduction of pop-up channels offering franchises such as Star Wars and The Fast and Furious has significantly increased the viewing of movies.
Foxtel will introduce a new set top box in early 2018, which will be cheaper than the current iQ3 but have a much quicker processor. The company will spend more than $400 million rolling out those boxes over the next three years.
As part of its efforts to make Foxtel more accessible, the service will be available for the first time in thousands of apartments and other multi-level dwellings via an iQ3-compatible cable.
The Foxtel relaunch was announced at a function in the Hordern Pavilion on Tuesday night attended by actresses Lily Sullivan, Madeleine Madden and Ruby Rees, who star in FremantleMedia Australia’s 6-part series Picnic at Hanging Rock.