Foxtel Turns to Hollywood Content Partnership for Australian Market Boost

Australian pay-TV operator Foxtel hopes its slew of new Hollywood studio contracts to bring movies to Foxtel subscribers in a similar timeframe with DVD releases will help the company recover from the Australian market’s 2010 slowdown.
    With selected titles on Foxtel’s existing PPV movie service and its new broadband-connected Foxtel On Demand Internet television service now being released within the DVD window, Foxtel’s Executive Director of Product and Sales Patrick Delany said the company hopes to cement new footing in the market. “We are also working towards screening the first new release 3-D video-on-demand movie for Foxtel iQ2 subscribers early in the New Year,” Delany said.
    Australian satellite pay-TV operators Foxtel and Austar reported disappointing subscriber growth in 2010 due to the challenging market environment created by the economic recession, the companies announced in their latest financial results issued in February. Austar ended the year with less than 765,000 subscribers, adding about 22,500 subscribers in the 12-month period. The operator’s revenues increased 5 percent to $712.1 million compared to the same stage last year.
    Despite the slower-than-expected year, the operator saw a strong increase in value-added services, with about 71,000 of its subscribers now taking HD services following the launch of the offering at the end of 2009. The operator also revealed that about 31 percent of its customer base now takes its MyStar PVR product. The operator has been busy over the last few days selling its 2.3 GHz and 3.4 GHz spectrum licenses to NBN Co. for $120.2 million. Austar also announced the sale of its mobile customer base to M2 Telecommunications for about $2 million.
    Austar’s pay-TV rival Foxtel also saw relatively light subscriber growth in 2010. At the end of December, Foxtel’s direct subscriber base grew to 1.6 million, an increase of about 2.4 percent compared to the same stage last year.
    The operator said the key to its business model has been selling advanced services such as the PVR and HD. About 70 percent of all Foxtel subscribers now access the operator’s iQ services after Foxtel expanded its HD offering in late 2010 to 20 dedicated channels and a dedicated 3-D demonstration channel. Foxtel reported that 25 percent of its subscribers were accessing Foxtel’s HD offering at the end of December.
    Foxtel said it is looking to make up lost ground through a deal it signed this month with Australian telco Telstra, which will see Foxtel provide 30 streaming on-demand channels over Telstra’s T-Box service. Foxtel also completed an agreement in December with Optus to sell Foxtel’s iQHD boxes and HD channels to Optus customers.