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Foxtel’s Kayo Hits 100K Paid Subscribers

Newly launched sports streaming platform, Kayo Sports, has hit 100,000 paying subscribers as Foxtel attempts to increase its customer base.

Foxtel’s Kayo launched in late November 2018 ahead of the cricket season, which Foxtel and Seven West Media bought joint broadcast rights in a $1.2 billion deal. Foxtel secured the digital streaming rights for cricket on Kayo.

Disclosed in a published report, total Foxtel subscribers — including Kayo, Foxtel Now, broadcast and commercial subscribers — totalled 2.9 million as of December 31.

However, the number of customers unsubscribing in the second quarter increased by 15.6%, up from 12.9% in the first quarter, and 14.5% in Q417.

Traditionally, in order for a customer to access sports in their Foxtel subscription, they would need to pay for an additional content package — costing roughly $40 – $50.

In contrast, Kayo offers subscription packages between $25 – $35 depending on the number of devices a customer wants to use at a time — similar to Netflix’s model.

This was implemented in the hope that it would increase the number of customers who are interested in sports content but unwilling to pay up to $50 for an additional sports package.

Some commentators speculate the strategy could backfire as Foxtel subscribers — who pay more overall — may abandon their pay-for-tv service for Kayo alone.

News Corp, which owns 65 per cent of Foxtel, noted its subscription video services fell 46% to $US71 million (A$100.1 million).

It attributed this fall to lower revenue, high production costs for the new Fox Cricket channel and the marketing of Kayo, and higher costs for NRL and Cricket Australia’s broadcast rights.

News Corp delivered a 13% overall increase in earnings to $US370 million in the three months ended December 31 and are optimistic about future earnings.

“Within our subscription video services segment, this quarter we launched Kayo Sports, a sports-only [over the top] product, to positive reviews, and we look forward, with confidence, to the peak selling season for the most popular winter sports in Australia,” said News Corp chief executive Robert Thomson.

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