Streaming competitors feast on Foxtel’s carcass

Roy Morgan Research has released new data showing that Foxtel continued to bleed subscriber numbers in the year to February 2020, at the same time as every one of its online streaming competitors grew their subscriber bases:

Netflix remains by far the nation’s most watched subscription television service, with 12.20 million Australians having access to it, an increase of 942,000 on a year ago. It is followed by Foxtel on 4.85 million (-98,000) and Stan on 3.70 million (+1.09 million).

Disney Plus, which only entered the Australian market in November 2019, now reaches 1.80 million viewers, placing it in fourth position ahead of Amazon Prime Video on 1.48 million (+914,000) and YouTube Premium on 1.48 million (+244,000).

Roy Morgan CEO Michele Levine says that while Netflix is the clear leader in subscription television services, there is growing competition to secure the attention of Australian viewers.

“Since entering the Australian market in 2015, Netflix has reshaped how we watch television. It created a product which allows users to make their own selection of uninterrupted television to watch whenever they want. Its success not only brought other players into the market, it forced commercial television to adapt by creating its own online streaming channels.

“Subscription television services continue to grow in Australia. Over the past year, an additional 893,000 people gained access to a streaming service in their household. All subscription television services have experienced an increase in viewers over the last year with the exception of Foxtel, which dropped by around 100,000 compared with a year ago.

This data obviously precedes the worldwide coronavirus shutdown, which has seen sporting events across the globe either cancelled or postponed, including the 2020 AFL and NRL seasons.

This sporting shutdown has impacted Foxtel particularly hard given its sole competitive advantage against its online streaming rivals is in live sports.

Over the past few weeks, literally thousands of customers have inundated Foxtel seeking to cancel their subscriptions to both Kayo Sports (370,000 subscribers as at February) as well as Foxtel’s traditional cable broadcast.

Foxtel has also been forced to slash its subscription prices in a desperate bid to retain subscribers, which has slashed the company’s margins.

In short, the coronavirus outbreak could not have come at a worse time for Foxtel, which was already struggling amid the competitive onslaught from Netflix, Stan, Amazon and Disney.