Four things Foxtel really needs to implement to fight off its competition
Yesterday Foxtel announced some significant changes to its pricing and some services. Here Simon Dell looks at what the pay-TV provider needs to do to really combat the upcoming arrival of video streaming services.
So I’ve spent the last few years having a crack at Foxtel whenever I could. I thought the service was expensive, restrictive and, in TV terms, antiquated. Sure, not as antiquated as the main channels and their: YOU WILL WATCH THIS WHEN WE WANT YOU TO WATCH THIS approach but still not dancing on the cutting edge of TV broadcasting.
And then I went and signed up for Foxtel. And not just any Foxtel. The super dooper premium $99 a month package. Even though the basic package has recently been slashed, I thought I’d get all the bells and whistles.
It must have been a moment of madness. Or it might have been the fact that my wife was running out of things to watch on YouTube. Or maybe it was curiosity. Either way, we took the plunge, signed up for six months and thought we’d see how it compares to the $15-odd-a-month we pay for Netflix and a VPN spend elsewhere.
First things first: the positives:
The sign-up and the install process were all brilliant. Efficient as any other service delivery I’ve ever used. Two guys came out when they were supposed to, moved some cables, took their shoes off without asking and knocked it over in 30 minutes.
Second positive – there’s a lot of stuff on Foxtel. A lot of stuff. Sure, there’s Toddlers and Tiaras, but there’s also a bag load of great drama, reality and comedy. Get the IQ recording thing right and you’ll never, ever be short of TV to watch.
Third (future) semi-positive – the ‘BoxSets’ channel announced yesterday. Sure we can all say ‘about time’, but at least Foxtel are acknowledging the changing viewing patterns of the average Australian family and the growth of bingeing on TV. There’s still going to be some ‘wait and see’ on it – will it provide the content that we actually want, or will they still hold back the premium content for the normal schedule? And will the BoxSets work through the Foxtel app?
Even then there’s an issue with premium drama where you can only jump into many series halfway through the second or third seasons, forcing you to go elsewhere to find the rest of the episodes.
And that’s about where it all ends. Sadly, the things that let Foxtel down are the things that could spell out its impending doom when Netflix rolls into Australia. Let’s hope CEO Richard Fruedenstein is listening.
HD Availability
So if you want to see your shows in HD, you have to pay even more. Not content with taking a $100 off you every month, you need to spend another $10. Why is this a rort? Well, most of the content you’re watching is shot in HD, so if they broadcast it as it was shot, then why pay another $10? Pace, who makes the Foxtel HD set top box, said that all of the IQ boxes delivered to Foxtel are HD enabled with a full HD processor built into the box at no extra cost.
Throw in the fact that the HD channels are then in between the normal entertainment channels and the movie and sports channels, you have to flick past them every time to get to anything. It’s like I’m being teased every time I scan the channels.
Management System
I had Foxtel about five years ago and in that time, no-one has thought to update the horrible, horrible content management system. It’s clunky. It’s ugly. It’s almost in 8 bit. And worst of all, you can’t use it and watch your show at the same time – unlike most modern HD TVs on the market. Even the shitty onboard computer system in my BMW has been updated in that time. Foxtel’s almost has cobwebs on it.
Again, the announcement yesterday mentioned IQ3 – Foxtel’s new management system – but will it be a patch-up or make-over on what exists, or will they have really put some sophisticated thought into the user experience and deliver a solution that wows the audience?
Mark Things To Record In Advance
There’s a new comedy series coming out with Jon Hamm and Daniel Radcliffe called ‘A Young Doctor’s Notebook’. It’s due to start on Foxtel mid-September and promos for the series are running now. All the time. Think you can set the recording facility to record it now, two weeks out? Of course not.
Series Link Whilst Watching The Series
So you find something you like to watch, whilst you’re watching it, you would think you could series link the whole thing with one button? Nope. Not a chance.
By the end of the first week, I’ve got the sneaking suspicion that Foxtel doesn’t actually want me to enjoy the experience of using Foxtel, and they certainly don’t want me skipping adverts. It’s almost as if they want me to go and download some shows. There’s a slight smell of panic mode with Foxtel – new updates and ideas based on competition, and not based on a genuine desire to provide the best viewing experience.
One day soon ad-free Netflix will arrive in Australia and that will knock Foxtel off balance. Then an Apple TV app store will arrive and that will be the end of that. You can’t help thinking that the question isn’t whether Foxtel have done enough to grow their subscriber base, but whether they can hold onto it at all?
Simon Dell is the founder and director of full-service marketing agency, TwoCents.
Great article about how for Foxtel competing is dropping the price rather than challenging the new business models coming in. I think it’s quite right to talk about whether foxtel can hold their base. The basic package is all 10 year old repeats and no one really wants to pay for that when it’s on netflix. Also my computer illiterate sister can google and stream most new tv shows herself so I can’t see why we need to pay $100+ just to watch them (not even to own them). We would quite happily pay $30 for an entire season if we could own it.
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‘I had Foxtel 5 years ago’ and this whole opinion piece was based upon his experience with a product in 2009?
Mumbrella, come on.
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Hi FOP,
As it states in the second paragraph the piece is based on someone who has recently re-signed with Foxtel after using streaming services for a long time. Simon had previously been with Foxtel five years ago, and is pointing out the user interface has hardly changed in that time with the EPG.
Hope that clears it up,
Alex – editor, Mumbrella
instead of all this complicated stuff why not let ppl get any content they like, live, recorded, binged, sport, drama, movies whatever, 1 TV, two TVs, 6 iPads, whatever for a simple monthly price.
You make the economics work by charging for view time in blocks. Light users – $25/mth (say 100 hours), heavy users $50 for 250 hours, etc (no ads).
Then you make money by investing in great content that more people want to watch more often.
bingo!
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The future is micro-payments over streaming sites and tiered payments for access to early releases. Having said that I am lazy and prefer to lean back and watch the TV come to me.
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Two words: Live Sport.
Its the only thing that Foxtel has that is a competitive advantage, that cant be replicated / downloaded in advance / etc.
I dont have the data but I bet 80%+ of Foxtel subscribers have Sport.
I cant see the point of it otherwise, unless you like watching tv shows and movies 6 months later
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I think the big over-arching problem is the fact you pay (a lot) for things you don’t want.
The majority of users just want the sport – that’s it. But you have to pay for everything else too.
It’s the equivalent of trying to buy groceries and being told you aren’t allowed your rice if you don’t also buy a hammer.
Australia leads the world in piracy including torrents of live sport. Any guesses why?
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@hmmmm, couldn’t agree more,
Foxtel without sport is like the bible without jesus – pointless.
Its the only advantage they have, Murdoch knows it, the clubs knows it and as a result the cheques keep on getting bigger and the players get richer.
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It should be renamed Sportstel
Everything else should be on freeview, apart from Fox News, which should be closed down, or renamed: Foxfodder
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You can use the Management System and watch TV at the same time.
There’s an option to have the current channel showing in the corner of the guide, but you have to turn it on yourself.
You can use the arrows at anytime to see what’s on the other channels without leaving the channel you’re on.
@hmmm.. I would estimate 90% of their US programming now is “Express from the US” they even put them on at weird times like 3:30pm which is as quickly as possible after airing in the UK. They launched BBC First channel specifically to show tv shows same day as the UK too.
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@Mike “You can use the Management System and watch TV at the same time.”
Thanks, I’ll have to look into that. Probably highlights my point that it’s not very intuitive. And why wouldn’t it default to that option first off?
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“Two words: Live Sport.”
You can watch any and all live sports online. It’s amazing how many people ditch Foxtel once you mention this.
Would link the sites, but don’t wanna stress out the mods. Quick search will find them.
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“signed up for six months and thought we’d see how it compares to the $15-odd-a-month we pay for Netflix and a VPN spend elsewhere.”
Its interesting that its deemed credible to access content illegally. Probably not a great thing to broadcast, that’s the sort of thing that can get people in hot water.
The debate of produced content vs real time content delivery like sport falls apart if there isn’t enough money in the “bucket” to produce quality programming. There won’t be a business case to pursue.
Do Australians want the only content they see to come from international sources? I would suggest the opposite.
On numbers, Foxtel should focus on Sport and News and real time viewing. There is a trend of people finding it reasonable to not pay for goods and services produced/secured by others at substantial expense. Why invest?
They should shut down the $700M+ invested into local economy/production each year.
Why don’t they?
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I would sign up tomorrow if I could have the channels I want without the “packaging” bit. I would even pay a premium for some. If they could come up with “any 5 channels for $25 a month” I’d sign in heartbeat. Or if I’m forced to buy essentials, let me buy single channels for a single fee. I don’t need 7 sports channels, just 1 (Fox Footy) would do me.
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You will be very pleasantly surprised by the new EPG. Did someone mention two weeks?
But let’s do the maths on the access-all-channels for $25 a month “plan” suggested. There are 118 channels. So the average channel would get around 21 cents per month per channel – that’s $2.50 a year. With 2.7m homes that’s $6.75m a year per channel. For that you would get half a series of House of Cards on endless repeat. (And all of the above assumes every cent is returned to the channels which is clearly pie-in-sky … so at least halve things.
As for a-la-carte expect $3-$5 per month per month and $10+ per month for the “big” channels such as Movies, Sport, first-run movies, HBO etc. I know that if I was paying a la carte my bill would more than double.
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@Bredan
“A spokesperson for Attorney-General Robert McClelland told The Australian: “In relation to the use of VPNs by Australians to access services such as Hulu and Netflix, on the limited information provided there does not appear to be an infringement of copyright law in Australia.”
So it doesn’t violate any copyright law in Australia. Australia also has a parallel import law in conjunction with the USA which also clearly defines accessing Netflix as legal.
With that in mind – you can not be arrested or charged or fined or anything of the sort for accessing Netflix. It’s pretty black and white in fact.
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And @ Brendan (I’ll get it right this time)
“Do Australians want the only content they see to come from international sources? I would suggest the opposite.”
Top 100 TV series on iTunes – how many do you think are Australian?
Three (and lots of Wiggles).
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Ive enjoyed Foxtel bashing over the years. But i gotta say if these 4 things are the only things wrong with Foxtel then they are in VERY GOOD shape.
They are minor user issues, and dont forget Netflix still has to deal with Download Cap limits on most Aussie broadband plans, so their barriers are looking a whole lot worse all of a sudden.
I live in the USA, and i love Netflix but there’s so much trash on there and the programming is old, so FOXTEL have an immediate advantage.
GO FOXTEL, STAY IN THE FIGHT!
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Choice Magazine also released guidance on how to access online streaming services using a VPN so I’m with Simon on that one.
I’d also like to point out that using the same VPN you can get Hulu and it features around 80 Australian television series and mini series under the ABC, Endemol and FremantleMedia networks. So watching them via Netflix or Hulu IS supporting local content.
I’m not into sport, but the one thing I love about Foxtel is the Lifestyle Channel. They have created some excellent local productions like Selling Houses Australia and Grand Designs Australia and I’ve got to say that cutting the price of the basic package has me tempted to sign up again just for that channel alone.
Foxtel also produced Love My Way but it unfortunately got ruined when it gained popularity and Foxtel decided to move it into the higher tiered packages thinking people would upgrade to watch. They didn’t.
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Ha, ha, Simon, we are paying the $110, not sure if it includes IQ, I can’t use the pre recording bit even though I followed instructions, sick repeats repeating themselves. I need a 10 yr old to show me how to pre-record!
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It’s uncool to admit it, but we weren’t impressed with Netflix at all. Even with a geoblocker, we couldn’t access all the content all the time. Also it was certainly cheap, but the content available reflected it.
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Simon I’m not sure that’s a good example to use, as I don’ t think Apple has local content available you can’t get anywhere else.
When looking at Free to Air programs, the stuff that rates is local and a bunch of the top programs on Foxtel are also locally made.
It’s clear there is a huge appetite for locally made shows.
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Simon,
Enjoyed your blog. I missed the announcement about the Foxtel price reductions in the media. Stupid me I thought it would be an advert. Turns out it was a serious news-piece written by a journo in the Courier Mail (and all other Murdoch mastheads I suspect). With such breathtaking cross-platform promotion I can’t see Foxtel ever failing!
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Am a Foxtel user since it first arrived in Oz in the mid 90s
(I still have no idea to work free-to-air digital TV).
And I agree with pretty much all of this.
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Pay TV has never really taken off in Australia because:
1) it came late
2) it was unable to monopolise sport, which gave Sky its breakthrough in Britain, and
3) it recycled too many programs we had already seen on free-to-air.
Well might Foxtel confess, “We have left undone those things which we ought to have done; And we have done those things which we ought not to have done; And there is no health in us.”
The new package announced last week suggests desperation. It’s looking like the jig is finally up.
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The only reason Foxtel is dropping prices is it now has competition. Standard definition pictures for $100 plus packages ?? They are dreaming now. Netflix and Amazon and Hulu are going to blow them away. (Netflix is causing them huge churns already) Sport is all Foxtel will have left to be locally competitive. Great to see. Arrogant company going down the tubes.
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