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Foxtel Confirms It Is Entering The “Bottom End” Content Market

As tipped yesterday, Foxtel, has moved to bolster their subscription numbers by offering no-contract and equipment-free packages from December.

The move is designed to bolster their position up against subscription streaming services like Stan, Netflix and Presto who are taking business away from Foxtel.

Foxtel chief executive Peter Tonagh speaking at the 2016 ASTRA conference said “Australian broadband infrastructure is not suited to delivering traditional premium quality of Foxtel IQ”, which is often delivered over a hybrid-fibre coaxial cable network owned by Foxtel’s half-owner, Telstra.

While the new offers do not require any Foxtel-supplied equipment or upfront costs and will be available through any device, chief executive Tonagh said.

“It’s more around [being] unicast or multicast, and a broadcast product is designed to deliver one to many… the [broadband] technology is just not designed for the mass market common streaming. “

Tonagh admitted that the new products are designed to increase the number of Foxtel customers in the “bottom end of the market”.

“I would describe [the bottom end] as those customers willing to spend $40 [per month] or less on content. And it’s not earnings driven, it is driven by, for example, young single professionals who don’t get value from our basic package. What we need to do is position the product so that the entry points are more appealing to the demographics that don’t fit the traditional Australian household.”

“Over time, our intention is to increase customer choices through our new low-cost device ‘puck’,” Mr Tonagh said. The new puck device will aggregate subscription services such as Netflix, like the esisting Telstra TV device.

Mr Tonagh also announced a new content deal with HBO that will give subscribers access to the back catalogue. He said this gave Foxtel more HBO content than Netflix.

The recent Game of Thrones series was the most watched show in Foxtel’s history, with an average of 1.2 million viewers per episode, split between live, replay and on-demand audiences.

Mr Tonagh said there were “nuances” that made Foxtel fundamentally different from the new streaming services, and the majority of Foxtel viewing was still done “live and linear on the TV set in the lounge room of the family home”.

“When we began 21 years ago, we were the great disruptors of the television industry, and from that moment forward we have been at our best when we are challenging and being challenged, especially in times like this – times of dramatic change,” Mr Tonagh said, outlining a new Foxtel strategy.

“Now, for the first time, many more Australians have shown they are willing to pay for the right TV proposition and that can only be a great thing for Foxtel.”

“There do continue to be a number of misconceptions about the relative strengths and capabilities of various players. And I don’t mean this is a complaint. Clearly it’s our job to better communicate the unique strengths of our product.”

The new deal with HBO starts on January 1 next year. It continues Foxtel’s exclusive offering of first-run programs and includes on-demand rights that remove any prior programming “rest periods”.

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