The Future of Foxtel is Not Assured

Disruption threats abound from the likes of Fetch, Netflix, Stan, Amazon Prime Video, Disney+, Apple TV+, YouTube, Spotify, Apple Music, podcasts, audiobooks, gaming & anything that vies for attention

Foxtel has yet another new logo.

This was announced at the start of September but is potentially massive news for Fetch TV and certainly supersedes Foxtel’s iQ3/4 set top box app strategy. Fetch could have access to a massive app store of TV apps with this Metrological deal:

Fetch TV and Metrological today announced a partnership that will see the Metrological Application Platform integrated onto the Fetch service. Fetch will also utilise the Metrological Lightning Framework to enhance the performance of the Fetch user interface.

The cloud-based Metrological Application Platform allows Fetch to seamlessly integrate premium OTT services, and niche and localized apps into one single viewer experience. The unified TV App Store and back-office product suite enables Fetch to onboard, monetise and optimise the life cycle of apps across their set-top boxes (STBs). This enables real-time response to subscribers’ changing content preferences.

Fetch have 800,000 users of their set top boxes at this point and it seems to me their technology is superior. They regularly update the firmware on their Mini and Mighty STB’s and have release notes unlike Foxtel with their iQ3/4 STB’s after they discouraged the practise shutting down the Foxtel Community Forums. Their Foxtel Fans Facebook group is a poor substitute.

Foxtel apparently have 2 million traditional Foxtel cable and satellite subscribers. I do not know if this is as bad as it will get for them as you’d think all the people who would have wanted to cancel would have during the Coronavirus pandemic. Plus they don’t want to admit it but they would be losing subscribers only interested in sports to Kayo. As Kayo now has 600,000 subscribers. Who can switch off when AFL/NRL seasons are over. I’m guessing apart from rusted in sports superfans Kayo subs would be very seasonal. There’s no contracts after all.

Also Optus Sport have 825,000 subscribers at last count. The power of EPL. How much would Foxtel be regretting letting that go? Would have been a great addition to Kayo. But Optus Sport have a great product so I hear. Also it is looking increasingly likely that Foxtel is going to lose the Super Rugby bid to Channel 9 and Stan in a joint bid. Foxtel, by ceding all these sports rights to first time sports rights bidders in Optus Sports and Stan (I know Channel 9 are sports broadcasting veterans) are creating future competitors. And possibly fierce ones at that that could take other sports off their hands.

It is harder and harder for Foxtel to compete on many fronts. Their movie channel package is obviously being disrupted by Netflix, Stan, Amazon Prime Video, Disney+ & Apple TV+. They won’t put a Foxtel Go app on Apple TV or a lot of other TV based app platforms.

I am losing faith in traditional Foxtel’s value proposition. If they lost the HBO output deal to Stan I think they would have been in a lot of trouble. They have sowed up NRL for many years to come into the future. I think they should do the same for the AFL and cricket. And at the very least they should start allowing Foxtel satellite and cable subscribers to authenticate and have access to Kayo as I am disappointed in the recent phenomenon of the “Kayo Exclusive”. That’s just disappointing to traditional Foxtel satellite and cable subscribers. Are they supposed to subscribe to Kayo and traditional Foxtel to get all the content? Seems ridiculous.

Foxtel are also in quite a lot of debt. Couple this with customers who are becoming increasingly aware that if they ring up and threaten to cancel they will get a better deal. And during the Coronavirus pandemic Foxtel were forced to try and do deals to keep customers around. That is if you could get through to their call centres which were constrained due to foreign call centres shutting down due to COVID.

What Would The Australian TV Landscape Look Like Without Foxtel?

Considering that free to air TV is getting hit just as much as these compounding factors our entertainment could become a lot more Americanised and British heavy. Even more so than it already is. We might see ourselves getting all of our entertainment from foreign streaming services predominantly. If Fetch TV survives there would likely be a flood of customers to them.

Sports would be dispersed across many different platforms. Optus Sport, Stan, Kayo? If it’s still a thing after Foxtel dies. Likely not though because if Foxtel is dead how could they afford the sports rights to keep Kayo as a going concern? Maybe a lot of sports would have to tighten their belts money wise as cheaper sports rights deals are struck by the remaining free to air TV networks. The sports leagues such as AFL, NRL and Cricket Australia may have to go direct to their fans with their own boutique offerings like NBA, NHL & NFL do in the US. Or they could try and attract the big tech giants in Google with YouTube or Amazon with Prime Video.

My Personal Experience With Foxtel Over The Years

I’ve subscribed to Foxtel for pretty much my whole adult life (I’m 34 now) as well as a few years as a teenager. And it was Austar for country folk like me pre-2010. I understand there is a huge movement on social media to #CancelFoxtel and #BoycottNewsCorp and I definitely appreciate the sentiments and aims of those campaigns. The $40 million the Coalition Government has gifted Foxtel is a whole other story from more politically minded writers than myself. But as an AFL and cricket fan Foxtel do offer coverage you can’t get anywhere else. I hate myself for saying that too. Especially with the Sky News After Dark poison chaser that comes with all that ad-free sport.

A few years ago (around 2015) when Foxtel sensed that Netflix would be moving into their turf they re-calibrated their channel packages so that they started at $26 a month. I jumped at that. but it didn’t last as current CEO Patrick Delany said this year that $26 a month Foxtel was “not a great experience”. So Foxtel as of around September last year started phasing customers onto their new base “Foxtel Plus” package at $49 a month. I’m guessing the “not great experience” with the cheaper packages was Foxtel for not getting the extra money that a more expensive package brings in. At least that’s what they are used to. And anecdotally a lot of older customers are stuck on older equipment and older, expensive plans.

I just wonder at what low point of subscriber numbers Foxtel parents’ News Corp Australia and Telstra decide it’s not worth it anymore. Will it be a sudden death ala short lived short form streaming service Quibi or a drawn out life as long as that of the man in charge of it all, Rupert Murdoch? It is all in the hands of Australian viewers and their subscription fees.

Anthony Eales is a media, news & tech junkie from Australia. You can reach him on Twitter @ants000.

Media, news & tech junkie.