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New Foxtel Streaming Service Tipped, Kayo Passes 330K

Rumours of a new Foxtel streaming service for entertainment and drama content have been further strengthened by another News Corp cash injection and the continued success of sports streamer Kayo.

News Corp chief executive Robert Thompson told shareholders on Friday that Australians were willing to pay for premium content according to the Sydney Morning Herald, echoing statements from Foxtel CEO Patrick Delany earlier in the month that Kayo would serve as an experiment for future streaming platforms.

“If we thought that Kayo was successful then we would proceed with the new product… what we are seeing at Kayo is success,” Mr Thomson said.

Kayo’s viewer base has now grown to 331,000 paying subscribers in less than a year of operation, but Foxtel Now has shed almost 60,000 paying subscribers, falling to 446,000.

The end of HBO hit Game Of Thrones is believed to be at least partially responsible for the fall.

Majority owner News Corp, who share ownership of the pay TV provider 65/35 with Telstra, has now loaned Foxtel half a billion dollars this year alone, with the latest US$200 million loan joining a US$300 million loan from May.

Foxtel earnings have also fallen by almost 20 per cent over the full-year.

Further details surrounding the rumoured new streaming platform remain scant, but if and when it does launch, it will be entering an increasingly competitive market, with an increasing number of SVOD services making inroads into Australia, including the upcoming incursions from Disney and Apple.

While Mr Thompson maintains people are willing to pay for premium content, it remains to be seen how far their dollar will stretch in a more fragmented SVOD market.

The impact of new players could also prove a challenge for Netflix in Australia, as well as Nine owned rival Stan, who had attracted subscribers with Disney content its unlikely to be able to retain beyond the end of this year.

Nine has been further expanding its media footprint through the acquisition of newspapers and other assets formerly owned by Fairfax, which had been a partner in Stan before the buyout.

Nine has also recently tabled a $1.46 per share offer for the remaining 45.5 per cent of Macquarie Radio it doesn’t already own, which has been unanimously recommended by the network’s directors, according to the Australian.

The offer values Macquarie at around $275 million.

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