Telstra has acquired a majority stake in Fetch TV for $100M with industry pundits scratching their head and asking why.
The telco will invest around $50m into Fetch as part of the deal, what’s not known is what this means as Fetch TV has an excellent set top box having launched their new Fetch TV Mighty box recently but are not seen as a major content player similar to Foxtel and Stan.
Fetch TV is an aggregator of content having to compete with most major TV manufacturers who are also spruiking access to streaming services on their TVs among them is the LG Electronics Web OS and Samsung’s Tizen smart TV offering.
ChannelNews understands that Fetch TV is going to be a replacement for Telstra TV which has around 800,000 active subscribers who are delivered the service via an old Roku puck box with the business operating as a stand alone entity.
Fetch has around 670,000 active subscribers, and the company’s incumbent shareholders, Astro Holdings, will retain a 49 per cent stake in the company.
What’s not known is who will run the business, Scott Lorson is the current CEO of Fetch TV.
Fetch’s set top boxes are sold in JB Hi-Fi, and Good Guys and has won awards in the SmartHouse Product Of The Year Awards.
Another issue is how competitors to Telstra will respond including Optus, Vocus and Aussie Broadband.
“While the current Telstra TV product remains popular, the underlying technology platform needs to evolve to support a deeper level of engagement through content offers, account management and rewards through Telstra Plus,” said Telstra’s executive in charge of technology Kim Krogh Andersen told the Australian.
Telstra who owns 35% of Foxtel have not explained the business model that will generate revenue via the acquisition of Fetch TV.
Krogh said of the Fetch TV box “It also needs to support future entertainment options and be delivered via the hardware options customers want including Smart TVs. After a strategic review of our options, we have selected Fetch TV for its ability to deliver this functionality at scale for our customers, given Fetch’s software development capability, innovative road map and strong track record delivering capability for other Australian telco partners.”
Fetch’s set top boxes provide access to pay TV channels, as well as streaming services such as Netflix and YouTube.
The deal is subject to ACCC approvals and comes amid a period of rampant competition for the streaming industry.
“This investment from Telstra will allow Fetch TV to accelerate growth and deliver a genuinely competitive Australian home and entertainment solution,” Fetch chief executive Scott Lorson said.
“Fetch has a hard-earned reputation for localisation, innovation and partnership, and today’s announcement will ensure a bright future for our subscribers, content partners, our emerging advertising partners and, importantly, for our telco and retail distribution partners.”
Telstra CEO Andy Penn told The Australian in an interview this month that any tie-up between Telstra and Fetch would not diminish the longstanding Telstra-Foxtel partnership.
