Disney’s Star Blow to Foxtel, Stan
The launch of Disney’s Star, which is Disney’s International equivalent of Hulu, into Australia in February, 2021 among other factors in the brave new streaming world could deal a blow to Foxtel and Stan, some would say even fatal.
Disney held an investor presentation this morning (stretching the attention of investors and journalists at four to five hours in length) where they announced a Disney’s universe worth of new TV shows and movies as well as the International expansion of Star, a new streaming addition to Disney+.
Disney+, Disney’s streaming service now boasts 86 million subscribers worldwide. That is a figure reached in just over a year. Netflix, Disney+’s next biggest competitor in the so called streaming wars is estimated to now have around 200 million worldwide subscribers.
The Verge has done a brilliant roundup of all the new Disney, Marvel, Star Wars, Pixar and National Geographic shows that are coming to Disney+ and theatres (yes Disney still believes in the power of the cinema-going experience. At least for now).
The effect on the Australian media market and the Australian streaming market in particular of this announcement is likely to be stark. Foxtel has content output deals in place with FX and 20th Century Studios and Stan has a content output deal with ABC Studios (US). Both of these deals will likely expire within the next year or two and we can expect that content to move to Disney’s Star.
There are also other forces that are conspiring against Foxtel and Stan in the streaming world. US telecoms & entertainment company AT&T which owns WarnerMedia, responsible for US streamer HBO Max has accelerated their plans to rollout HBO Max internationally. If Australia is on that fastened roadmap we can expect to see Foxtel’s content output deal with HBO expire and those shows would naturally move onto an Australian iteration of HBO Max. This will not happen for at least a year as Foxtel recently renewed their HBO output deal. HBO is responsible for some of Foxtel’s biggest shows in the past few years such as Game of Thrones, Westworld and Big Little Lies. It will be interesting to see if this change happens in time for the launch of upcoming spinoff of Game of Thrones, House of Dragons.
And if that wasn’t enough for Australia’s Foxtel and Stan, Comcast owned NBCUniversal, responsible for newly launched streamer Peacock is looking like it will also move up it’s planned worldwide launch. And Foxtel and Stan both have deals with NBCUniversal. Stan in particular having rights for Peacock’s content. It is quite likely that there will be a forceful expiration of content rights for NBCUniversal and Peacock content in Australia over the next couple of years timed with the launch of Peacock here.
And let’s not forget about the upcoming transformation of 10 All Access to Paramount+ along with CBS All Access in the US, which will also be changing its name to Paramount+. Channel 10 already has output deals for CBS shows but some CBS shows like Star Trek: Discovery are exclusive to Netflix. It is uncertain if these deals will expire with the aim of getting everything on Paramount+, as ViacomCBS doesn’t see the need to keep everything exclusive and is happy to take profits from selling the rights to their shows and movies to other streamers and pay TV companies. ViacomCBS is the parent to MTV, Nickelodeon and Comedy Central. Although not their current strategy if they decide to make their content exclusive to Paramount+ expect further hurt to Foxtel and Stan.
There is also the recent launch of BritBox into Australia, which combines the content of the BBC and ITV. If BritBox wants to retain content on an exclusive basis this is also another dagger to the throats of Foxtel and Stan.
And though not on everyone’s radar Discovery announced the launch of Discovery+ this past month. It will be filled with documentary and reality content. If this launches in Australia on an exclusive basis then Foxtel could be looking at a lesser Discovery channel or like the Disney channels before it no channel at all, at least on Foxtel.
This will leave Australia with many major streaming services. Netflix, Stan, Amazon Prime Video, Disney+, Apple TV+, YouTube/YouTube Premium, Foxtel’s Binge & Kayo Sports, Plex, 10 All Access (soon to be come Paramount+) Optus Sport, Britbox, Hayu, CuriosityStream and in time Disney+’s Star, HBO Max, Peacock and Paramount+. When does streaming service and paying for television fatigue start to set in? Which entertainment companies in streaming and pay TV will retreat first? How many streaming services the world can sustain let alone the Australian market is a very important question. Will Australia’s lagging Internet infrastructure provide a hard wall on the upper limits of how many subscribers these streaming services can reach?
In my estimation, sports will become increasingly important both to Foxtel and Stan in the coming years. Foxtel have announced their intention to focus on marquee sports, scaling back those that are not AFL, NRL or cricket. Meanwhile Stan have announced Stan Sport and scooped up the rights to Super Rugby and tennis tournaments Wimbledon and the French Open.
Foxtel also needs to lift its game technology wise. Competitor Fetch TV is months away from launching an app platform that will see an explosion in the amount of apps available on its Fetch Mini and Mighty boxes. Foxtel’s iQ3 and iQ4 set top boxes only have Netflix, ABC iView and SBS On Demand. Fetch TV is closing in on a million subscribers. The partnerships with Internet Service Providers in Australia has proved very fruitful for them.
Disney also announced that Disney+ will be raising prices next year. The March 2021 price rise will almost certainly coincide with the launch of Disney+ Star which will have an additional cost on top of Disney+. We will see how this goes down with Disney+ subscribers. With all this new content they have announced it is likely people will eat the costs. But if Netflix price rises are anything to go by Disney could be in for a bit of a shock.
And with HBO Max announcing they will be releasing their 17 movie 2021 slate day and date with US cinemas it is no wonder they would be wanting to speed up the launch of HBO Max internationally. As soon as Christmas Day US time this year Wonder Woman 1984 will be released onto HBO Max and whichever US cinemas are still open. Wonder Woman 1984 will launch into Australian cinemas on Boxing Day. And Australian cinemas definitely could use a boost. I fear that boost may be limited. As we have seen with Game of Thrones Australian consumers are notorious pirates. And with Wonder Woman 1984 to be released in 4K HDR it is only a matter of time before perfect copies of the film end up on pirate networks. The same could be said for the 2021 HBO Max Warner Bros. film slate. Directors such as Christopher Nolan have blasted the move and Dune director Denis Villeneuve has called out the piracy effect.
The future of Foxtel will most likely be Binge and Kayo as Foxtel looks to cut the costly satellite TV boxes and bulky satellites required to be installed every time a new customer signs up. Stan’s future is likely Stan Sport and more original Australian content. But without all the US and UK content to support these Australian entertainment purveyors the budgets and number of originals to be produced will likely decline.
This all among the backdrop of Australian free to air TV on a structural decline as they desperately try to stay alive by bouncing reality television shows between themselves as their ratings keep declining. As I’ve written before, the future of Foxtel is not assured. Now I’m not so sure how Stan will fare in the coming years. The future is in streaming and I don’t know if Australian entertainment companies can keep up.
Anthony Eales is a media, news & tech junkie from Australia. You can reach him on Twitter @ants000.