Foxtel’s new online streaming service ‘Binge’ will reportedly launch next week with an expected monthly price tag of $15.
The service will give subscribers access to over 10,000 hours of content, including curated local and international dramas and movies.
Foxtel is hoping that the new service will drive subscription growth by attracting new customers that are not already subscribed to its existing premium services.
I see three major problems with Foxtel’s ‘Binge’ strategy.
First, if Binge does indeed launch at $15 a month, it will remain relatively expensive against the entry-level packages offered by its main rivals Netflix ($10) , Stan ($10), Amazon ($7) and Disney ($9). Thus, it will remain at a significant price disadvantage.
Second, ‘Binge’ will compete directly with Foxtel Now, whose entry-level package is priced at $25 a month and arguably offers less because it does not include movies (but does include live television).
Accordingly, many existing Foxtel customers will likely downgrade to the cheaper Binge package, crushing the company’s profit margins.
Finally, Foxtel has arguably moved too late into the discount streaming space. The market is already packed with offerings and there are question marks over whether cash-strapped Australians will subscribe to another service in significant enough numbers to turn Foxtel’s fortunes around.
That said, more competition is always good for consumers, and they stand to win from Binge via cheaper access to exclusive content, like HBO.
