Foxtel On A Roll After Major Restructure Kayo & Foxtel Now Subscribers Up
The Rugby World Cup, and increased demand for live sport appears to have been good for Foxtel with their Kayo Sports streaming service set to hit over 400,000 paying customers in a little over 12 months. The business has also increased revenues from $1.3 Billion to $3.1Billion during the past financial year.
Launched in November 2018 Australians have taken to the new $25 a month Kayo service with the bulk of the business being new consumers Vs Foxtel’s traditional subscriber, however content and programming costs are climbing.
As of June 2019 Foxtel, had 331,000 paying customers this was up from 209,000 in early May.
Last week Foxtel moved to add further value to their subscriber customer base with the roll out of Foxtel First a new program that rewards for ‘Loyalty’ Vs how much users spend with the network.
During the past 12 months Australia’s largest streaming Company has undergone a major restructuring following the appointment of Patrick Delany and an expanded shareholding in the business by News Corporation after Telstra refused to contribute more capital to the running of the business.
Also growing is the Companies Foxtel Now service with Foxtel adding 142,000 additional subscribers to a total of 446,000 paying subscribers, a 32 per cent jump over the prior year.
Delany who punted on launching a new 4K 1Q4 box in time for the 2018/2019 cricket season has also managed to hold onto his premium customer base with churn running at 14.7% which is around what it was the prior year.
A major issue for the Foxtel board was resolved when the Company successfully repaid a $213.6million borrowing. Majority shareholder News Corp loaned the business $500M interest has not been identified.
“On July 25, 2019, the group repaid the balance of the US Private Placement Facility 2 – Series D debt that matured in July 2019 through the combination of new working capital facilities drawn from News Pty Limited and existing cash reserves,” Foxtel’s financial accounts filed with the Australian Securities and Investments Commission said.
Currently the business is sitting on $32 million in cash as of June 30, 2019.
It’s expected that News Corp will also pay out US $106.8 million in additional borrowing that are due next year.
Under Delany and News Corp Foxtel has reduced its losses from $57M last year to $8.8 million in the 2018/19.
As Foxtel restructures their content and sports coverage programming costs have risen from $716M to $1.66 billion however these numbers have considered the merger of the Fox Sports operation in April 2018.
According to Delany Foxtel plans to launch an entertainment and drama streaming service in the first half of 2020 which will compete head on with both Netflix which is now on the Foxtel remote and Disney+ which launches on the 19th of November.