July 31, 2019
Netflix has partnered with Australian pay-TV operator Foxtel to help grow subscribers in an over-the-top video market it already dominates.
The pact comes about two years after Foxtel shuttered Presto, a proprietary SVOD service co-operated with Seven Network.
New research from Roy Morgan shows 13.36 million Australians now have access to either Netflix or Foxtel via a household subscription — which represents 64.4% of all Australians over the age of 14.
The research firm said 11.5 million Aussies have a household subscription to Netflix, while about 5 million have a subscription to Foxtel. About 3 million have access to both services.
Netflix, which launched service in Australia and New Zealand in 2015, is targeting the 2 million Foxtel subs who aren’t already members.
The service, which earlier this month posted its first quarterly U.S. subscriber loss in eight years, generated little more than 50% of its projected international subs.
“Foxtel and Netflix are undoubtedly the two giants of Australian pay-TV and the plan for Foxtel to provide Netflix through the Foxtel IQ box set … carries significant opportunities for both services,” Roy Morgan CEO Michele Levine said in a statement.
“[It’s] a solid defensive measure to help prevent existing Foxtel subscribers ditching the service to move to cheaper [OTT video] alternatives and provides an extra incentive for new users to sign up for Foxtel,” Levine said.
“The proliferation of cheap streaming video services led by Netflix in recent years has provided the biggest challenge yet to Foxtel’s traditional pay-TV business model and there are more cashed up competitors on the way.”
Indeed, nearly 3 million Australians watch Stan SVOD platform and services such as Amazon Prime Video and YouTube Premium are growing quickly.
“The more Foxtel can be regarded as the ‘gateway’ to video content from the likes of Netflix, and perhaps other rival services in future, the more access Foxtel will gain to detailed user data metrics that will help them tailor their services, and advertising, to individual viewing preferences and the more valuable their service will in turn be to advertisers looking for an audience,” Levine said.
“For Netflix, the ability to link up with Foxtel’s News and Sport services and be a frictionless option for the Foxtel viewers who don’t currently access Netflix, is an opportunity for growth in a market which may be reaching maturity.”