Foxtel talks down streaming rivals

19 August, 2015 by Don Groves

Foxtel is supremely confident subscribers won’t desert the full-service pay TV model in favour of the far cheaper streaming services.

CEO Richard Freudenstein predicts the vast majority of Australian homes will have either Foxtel or an SVOD service and many homes will have both.

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Dismissing the threat from Netflix, Stan and Presto amid analyst reports that 2.1 million homes are watching SVOD platforms, he said, “Even if all those customers were paying, the total revenue for all SVOD services would be only around $150 million per year. That doesn’t provide much for programming investment compared to Foxtel’s (or free to air) programming budgets.”

Addressing an Australia Israeli Chamber of Commerce lunch, he said, “The best analogy for SVOD services is they are the digital video store. People who used to supplement free to air viewing by renting the occasional DVD are now doing so by using an SVOD service.

“This is borne out by the fact that in the US and UK SVOD and pay-per-view revenues have grown in direct proportion to the decline in DVD revenues, while subscription players have continued to grow.

"Foxtel is a premium service, which naturally costs a bit more, whereas Netflix and Presto are add-ons either to free to air for people who don’t watch much TV or to subscription TV."

The exec boasted about the addition of nearly 230,000 new customers in the last fiscal year, up 8.6 per cent, which is the highest rate of increase since 2000.

Foxtel is now in 2.84 million homes and is used by more than seven million people per month. The churn rate is 10.9 per cent, the lowest in the company’s history, down from 12.5 per cent in the previous year.

Despite dropping its entry price by 50 per cent last November, the average monthly revenue per user slipped by just 2 per cent to $93.

Freudenstein talked up the fast-tracking of the US series Fear the Walking Dead and the upcoming Australian psychological thriller The Kettering Incident and the Foxtel-commissioned  A Place to Call from Seven Productions, which premieres next month.

Filming starts in Canberra next week on Matchbox Pictures’ Secret City, a political thriller directed by Emma Freeman, starring Jacki Weaver, Anna Torv and Dan Wyllie, for showcase.

 

 

 

 

 

 

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