Two years ago, as the world headed into lockdown, Foxtel faced an existential threat.
With global sporting events cancelled, Foxtel suffered a large loss of subscribers, which ultimately led to hundreds of employees being made redundant in a bid to shave costs.
Over the following two years, Foxtel has experienced a renaissance.
It began when Foxtel outbid local streaming rival Stan for exclusive rights to HBO, Warner Bros and WarnerMedia content, bolstering its exclusive line up.
Foxtel then launched its Binge streaming service, which has proven to be very popular.
The proof is in the pudding with the latest Roy Morgan viewer numbers showing 23.9% growth in the 2021 calendar year, while Stan’s fell by 4.0%:
With Foxtel experiencing a purple patch, owners Newscorp (65%) and Telstra (35%) are reportedly in the final stages of deciding whether to push ahead with a share market float later this year. A final decision on whether to float is to be made in mid-April before Newscorp’s next set of financial results.
In my view, Newscorp and Telstra should strike while the iron is hot and Foxtel’s momentum is strong. Competition in the streaming space is only likely to intensify as new players enter the market. The biggest risk to Foxtel is if HBO Max enters Australia and pulls its exclusive content deal from Foxtel, which is due to expire next year.
While Foxtel’s position in the Australian streaming is relatively strong right now, the situation could quickly change.
