Foxtel “threatened with extinction”

Foxtel’s problems have been well documented on this site.

Even before the COVID-19 pandemic hit, Foxtel was struggling to remain relevant in the subscription television space, rapidly losing market share to its nimble and cheaper online streaming rivals:

Once the industry leader, Foxtel lost 582,000 subscribers in the two years to February 2020, according to Roy Morgan, at the same time as its online streaming rivals enjoyed strong growth:

Since February, the situation for Foxtel has obviously gone from bad to worse, with the COVID-19 pandemic postponing live sporting events across the globe, including the 2020 AFL and NRL seasons, resulting in the loss of thousands of more subscribers.

This revenue squeeze has left Foxtel struggling to repay $2.5 billion of debt and forced the company to axe 200 staff in April, followed by another 70 staff last week, in a bid to balance its books.

According to Cox Media founder Peter Cox, Foxtel is “threatened with extinction” and may only survive as long as Newscorp remains willing to continue bailing-out the company’s debts:

“They always had a problem in the summer, because they didn’t have good sports coverage in the summer,” Mr Cox said.

“Now, not to have good sports coverage in the winter is an absolute killer for them” [Peter Cox said]…

Foxtel prices compared with other streaming services are just too expensive…

Long-time media and telco analyst Paul Budde believes it’s a potentially terminal issue for Foxtel.

He says within three years, Foxtel will have to completely change its business model.

“[It could] become like another Netflix, or, you know, another model that they may think of, otherwise I don’t think they will survive for much longer”…

“Foxtel is expensive as a subscription service, so you will see more and more people copping out of Foxtel because they are not using it, or sport is no longer there, which is what they wanted it for,” Mr Budde said.

These are the exact issues that have been raised repeatedly on this site.

Foxtel will only survive by slashing its cost base, jettisoning its legacy cable hardware and broadcasting business, and becoming a ‘lean and mean’ online streaming provider.

Leith van Onselen
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Comments

  1. darklydrawlMEMBER

    “Foxtel will only survive by slashing its cost base, jettisoning its legacy cable hardware and broadcasting business, and becoming a ‘lean and mean’ online streaming provider”.

    I don’t think they can do it – the writing has been on the wall for years and they haven’t acted upon the warning signs – covid has speed things up a bit, but this day has been coming regardless. Reminds me of Sensis / Print media back in the day pretending the internet was a fad and no threat to their current business. By the time the realised their mistake it was all over.

  2. Michael Attwood

    Foxtel has negative brand value because it is associated with ads, set top boxes, and expensive plans.

    Why does Telstra even need to be in payTV? The market in Aus is already flooded. There is Netflix, Stan, Disney+.

    Stan is starting to get its own Button on remote controls which is a killer feature.

    Foxtel has no effective leadership. It will die out like the White Pages, Sensis etc. exactly as other say.

    Once Stan launches Stan Sport, with Footy etc., its all over.

    • darklydrawlMEMBER

      Telstra went thru a ‘phase’ a few years back where management realised they had screwed up their yellow pages business (Google smoggle indeed!) and other ancillary businesses and were quickly becoming just an ‘wires and poles’ company that provided the backbone for others to get rich on sending content. Thus the segue into being an ‘content’ and services business. They wanted to be Netlfix, spotify, ESPN and the App store all rolled into one, but ended up with bugger all as they back the wrong horse(s) – Again!

  3. bennozMEMBER

    i signed up to foxtel iq4 on a rolling month to month no lock in contract with the 1st 3 months free.
    Had a technician wire my house. Install a satelite dish. install hardware.

    after 3 months i cancelled my sub as i wasnt happy with the service as i mainly wanted sports (AFL, F1) and was watching netflix mostly

    • darklydrawlMEMBER

      In my experience their business model does seem to be premised on the idea that once you get Foxtel, you’ll love it and keep it. They also don’t help themselves. When I moved house a couple of years back I wanted move the service. There was some stupid moving fee ($200?). I said, let’s move it for free. “No can do!”. Then the call centre operators told me to cancel the service and reapply that the new house. They had some deal where they would do the install for free, plus 3 month of top teir for free as well. Took 3 tech hours to install the bloody thing (no idea why, it was a simple gig with pre existing conduits et al). After 3 months I went back to my $10 p/m IQ only package. I doubt they have covered the cost of the install after 2 years of $10 a month!

      • drsmithyMEMBER

        Yep.

        My parents have had Foxtel forever and I’ve been looking after it for them for years because left to their own devices they’d have stayed on some ridiculous legacy plan for like $150/mo without even HD or Movie channels.

        Every year, Foxtel notify me that whatever sweetheart deal I’m on will revert to a “standard” subscription. So every year I ring up and threaten to cancel the service. Most times they just extend the same deal another 12 months. Occasionally I have to actually cancel it and re-sign under whatever new sweetheart deal is active (there’s always one of some description going) at the cost of a few days off the air. Last time I had to actually go through with the cancel/re-sub, which had the advantage of a free satellite dish install to get them off the old cable connection (would otherwise have cost several hundred $) so they could switch to the latest 4k IQ-whatever box.

  4. tuohyredMEMBER

    I tried to cancel using “chat” – kept all records. Phoning to cancel is useless – now just don’t pay and we’ll see what happens

  5. I’m not fussed about what happens to Foxtel generally, but what is the future of Sky News if Foxtel is losing money? If Sky disappeared it would be a huge service to public discourse.