Binge ads a ‘success’ so far says Foxtel Media’s Frain; lessons learned from rival launch

Three weeks into Foxtel introducing ads into its ‘Basic’ tier on Binge, Foxtel Media CEO, Mark Frain’s assessment is that it has “gone very well”.

That’s the opening headline, he said on this week’s Mumbrellacast, with 75-80% of Binge’s lower base subscribers now receiving advertising through its new product.

Frain

“We’ve been as you’d imagine pretty careful, and I would say cautious on the rollout. So it’s been a gradual rollout of different devices over the last couple of weeks, from iOS and getting into Android and progressively building the audience, just making sure we ensure that the customer experience remains as premium as it was without ads and secondly, making sure that delivery for our advertising partners is there.”

Frain said going by recent statistics over the weekend, the company is “over-delivering” on the numbers it was forecasting, which he said is “a good sign” while not running at full audience potential as of yet.

In contrast to Netflix’s ad launch, which went live in November, Binge introduced ads to a significant base of subscribers last month, as opposed to Netflix which created a new tier.

While the global streamer’s Q1 results this morning told a story of engagement “above our initial expectations” in regards to its ad tier, there has been little switching from standard and premium plans to its ad-supported tiers, it said.

This also came amid reports in December from Digiday that Netflix had given money back to advertisers due to a shortfall in promised viewership targets.

Binge ads launch phase a success, according to Frain

In a potential dig at Netflix’s slow ad launch, Frain insisted that while the 21 partner launch “could have sold to 40”, Foxtel Media was very reticent not to push it too far, “having watched what happened with previous launches to make sure that we delivered an audience for clients”.

On the flip side, progress has been boosted by continued subscriber growth, with the platform now reaching a high of 1.375 million paying subscribers, it told Mumbrella yesterday just three years after its launch.

“It was always about if we’re going to move forward with this, we’ve got to move forward with sufficient scale to start with,” as he added the value equation had to be “fairly equitable” from a customer perspective, with customers being gifted HD content, as well as maintaining the entire catalogue, in exchange for four minutes of ads per hour.

With an estimated base of around 500,000 on Binge’s basic tier, Frain said it is too early to tell have many have switched their plan following the ad introduction.

“I’ve never seen an advertiser product leave our business and be sold as quickly,” he said, with the product launching initially with 21 premium brand partners. 

Interest first came in after Foxtel’s upfronts in October, and by the Australia Day public holiday, he said it was “sold out”.

Going forward, Frain said there is a lot of confidence in the market and from clients in moving forward with Binge’s ad product, but remained level-headed about the outlook.

“Let’s get to the end of the campaign period and make sure we deliver from that perspective, and I think if we do that, there’ll certainly be repeat investment from there.

“There’s a lot of confidence in the way we’ve gone about it and therefore there’s a lot of commitment to move forward at scale, and by scale, I mean in revenue terms from agencies and other clients that want to be on board, because they’ll see the success of the launch phase.”

In regards to VOZ, which is set to launch on 1 May, Frain said it remains the intention of the company to “move forward with OzTam and Doug Peiffer on the VOZ journey”.

It has taken Foxtel “a little longer” to get Kayo integrated into VPM, he said, which is a box that has to be ticked, “before you can move into the VOZ journey, and certainly from both Doug’s perspective and mine, that’s probably taken us too long”.

The full interview with Foxtel Media’s Mark Frain can be found on this week’s Mumbrellacast at the 26:53 mark.