Why Is Telstra Looking To Buy Out Fetch TV When They Could Buy News Corp’s Share Of Foxtel?
Serious questions are being asked as to why Telstra is in discussions to buy a share in Fetch TV, who is a key partner of Optus.
Telstra owns 35% of archrival Foxtel with insiders telling ChannelNews that Telstra believe that they can still own a 35% share in Foxtel and a major share of Fetch TV.
The move could be a major blow to Optus’s aspirations to be a player in the content streaming market.
The begging question claim analysts, is why the big Australian carrier does not buy out the share of Foxtel they don’t own.
Baffling for observers is how Telstra will deliver a return for shareholders especially as they have failed in the content market on several occasions in the past.
Back in 2015 Telstra was crowing that they were set to “revolutionise” the content market with a Roku 2 TV set top box, they even flew out the CEO of Roku to launch the device.
At the time Telstra flagged Presto (a Foxtel-owned service) since dumped, Stan (a Fairfax and Channel Nine co-owned service) and Netflix as key streaming services to be available through the box, as well as “a selection of TV catch up services and latest release movies from BigPond Movies.”
The exercise was a massive failure with consumers choosing Foxtel over the Telstra Roku offering despite the Telstra boxes being given away for free.
Another failure for Telstra was ‘BigPond Movies’ which despite a lot of hype failed to generate appeal with consumers. It was also impacted by the arrival of Netflix.
Telstra also had a crack at trying to buy Channel Nine at one stage, they also mounted a legal case against Melbourne Council in 2020 in an effort to roll out large digital advertisements on Telstra payphones The Federal Court of Australia deemed them legal.
Fetch, which was launched in Australia in 2008 delivers content over an IP network similar to what Foxtel is doing with their new iQ5 box.
Their Fetch Mighty and Fetch Mini boxes are currently being upgraded.
The new Fetch Mighty will have a faster core processor: 24 DMIPS vs 12 over the previous model. More RAM: 4GB vs 3, More Flash: 8GB vs 4. It will also have Wi Fi 6 an upgraded tuner, HDMI ports have been upgraded to HDMI V2.1 with HDCP 2.3. It is set to retail for $499.
One Telstra source said earlier today that Telstra wants to bid for digital sports rights with content being delivered via the Fetch TV box.
This would see them go head-to-head with the News Corp controlled Foxtel.
Telstra believe that they can sell advertising around the Fetch TV content, currently Optus has the rights to Premier League Football. A League soccer in Australia is delivered via the Paramount + app which is available on Fetch TV.
One source said, “Telstra would stand a better chance of buying out News Corps share in Foxtel and then cementing a close relationship with News Corp who have the biggest sporting media footprint in Australia”.
Nine Media recently claimed that industry sources said Telstra’s strategic interest in Fetch was related to its established position as a local aggregator.
The acquisition of News Corps shares in Foxtel, would also give Telstra control of Kayo Sports and Binge, which are competitor to Fetch TV.
Fetch TV chief executive Scott Lorson claims that Fetch TV is now in 670,000 households and has 750,000 billings when including people who run the service in multiple rooms.