Foxtel who are struggling to grow their subscription base is set to announce a new Foxtel Play service in a move that could see Presto killed off.
Under pressure from both Netflix and Stan, Foxtel is now looking at a two-tier approach aimed at holding onto their current top end subscription base which is primarily built around sports content while at the same time introducing a budget service aimed at taking on Netflix.
Currently a combination of movies and sports packages can cost a Foxtel customer over $100 a month.
At the same time Netflix has attracted over 1.8 million consumers with a service that ranges between $8.99 and $14.99.
Stan which is owned by Nine Entertainment charges $10 a month. Stan is believed to already have over 400,000 subscribers.
According to the Australian newspaper which is owned by News Corporation who also own 50% of the pat TV network, Foxtel chief executive Peter Tonagh is planning to launch of an on-demand streaming service in what will be one of the most daring moves yet by the 21-year-old company.
Mr Tonagh is expected to announce the new service at Australian Subscription Television and Radio Association’s annual conference in Sydney, tomorrow.
It is not known what Telstra is set to do with their Telstra TV service. Insiders claim that the service is struggling and a move by Foxtel which is 50% owned could put further pressure on the Telstra service which is delivered via a budget Roku set-top box.
Next year at least two major TV brands will deliver a Roku set-top box capability built into an ultra-high definition 4K TV.
Foxtel is also facing the real possibility that they will have to compete up against Amazon Prime, which is a popular US streaming service, that is tipped to be launched in Australia next year, several TV manufacturers as well as Fetch TV set to offer the Amazon Prime service on their devices.
The Australian said that contract-free bundle under the Play sub-brand is aimed at luring Netflix and Stan customers with a more flexible structure under a month-by-month payment plan.
Play users will be able to buy a package with specific genres such as drama without committing to a full Pay-TV package and satellite or cable connection.
Mr Tonagh’s approach is to keep hold of Foxtel’s core customer base while addressing the budget end of the market.
Under the Play model, users can subscribe to a sports pack to watch every live round of the NRL, AFL, Super Rugby, V8 Supercars and Formula 1. These sports are broadcast on channels operated by Fox Sports Australia.
The addition of these services could add up to $40 a month to the budget Play subscription service.
Industry sources believe the bet could tempt customers to test Foxtel without committing to a lengthy contract.
Foxtel increased subscribers 4.6 per cent to 2.9 million in fiscal year 2016, up from 2.8 million in the previous period.
This was primarily due to Telstra customers being offered a free trial period or a budget subscription to Foxtel.
News Corp (publisher of The Australian) holds 100 per cent of Fox Sports and 50 per cent of Foxtel, with the rest owned by Telstra.
