Presto In Trouble Partner Tipped To Quit
The first cracks in the highly competitive digital streaming market have appeared, after it was revealed that Presto joint venture partner Seven West Media, is looking to cut its investment.
Under pressure from Netflix and Stan, Presto which only has an estimated hundred and 12,000 customers is part owned by Foxtel was told recently that Seven West Media would only fund the company for another six months rather than a full financial year.
According to the Australian newspaper’ which is owned by News Corporation who is also a 50% owner of Foxtel, Seven West Media is expected to pull out, leaving Presto looking for either a new partner or having to be funded by Foxtel. ChannelNews understands that the company is struggling to compete up against Netflix and Stan.
Some insiders claim that if a split occurs that Presto could become the first victim of the booming streaming market.
Currently Seven is reluctant to invest any more money into the venture.
According to TV manufacturers who are carrying Presto as part of the Smart TV offering, Presto is failing to attract ongoing paying customers after free trial or promotional offers have expired.
Seven chief executive Tim Worner this month pointed out that Presto posted subscriber growth of 193 per cent in fiscal year 2016, powered by a movie-length episode of Home and Away.
“This business is benefiting from Seven’s content production strengths and there are more commissions in the pipeline,” said Mr Worner.
Fairfax last week said Stan had reached 500,000 active subscribers and was expected to break even in fiscal year 2018, while research firm Telsyte said Presto had 112,000 paid subscribers in June.
The Australian newspaper claims that one option under consideration is folding the Presto streaming service into one of Foxtel’s other broadcast platforms, such as the Foxtel Play system that allows the subscription TV group’s channels to be streamed over the internet without a set-top box.
It is understood the Play product will be shaken up with a new price point by the end of the year, regardless of whether it is merged with Presto.
Play’s entry price is $25 a month and the most expensive option costs $50, while Presto ranges from $10 to $15 a month.