While Foxtel’s longer-term outlook remains dire, it managed to score a major win this week securing a “multi-year” content deal with HBO and Warner Bros worth up to $200 million.
The new agreement will give exclusive programming rights for shows from the Warner Bros, HBO, HBO Max and WarnerMedia stable. These include existing heavy hitters such as Game of Thrones, Succession, Big Little Lies and Westworld, alongside new shows like the Gossip Girl reboot and the Friends reunion.
It also secures rights for children’s channels like the Cartoon Network and Boomerang.
The new deal will hamper rival Stan, which bid against Foxtel and currently offers some WarnerMedia programs on its platform.
It will also delay the introduction of HBO Max into Australia, which is launching in the United States later this month.
As I have argued repeatedly, Foxtel only has two competitive advantages in the Australian subscription television market:
- Live sports, including rights to the AFL and NRL; and
- Exclusive rights to HBO content.
If Foxtel had lost the rights to HBO, there would have been even less incentive to subscribe, given Foxtel costs considerably more than its streaming rivals, including Netflix, Stan, Amazon and Disney.
Even with HBO secured, Foxtel is facing an uphill battle given it is drowning under $2.5 billion of debt, is encumbered with a high cost base (including expensive legacy cable hardware), and is facing ever-growing competition from cheaper streaming platforms.
But having exclusive rights to HBO means Foxtel will live to fight another day.
