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Foxtel slashes prices and puts more premium content in basic package in bid to tackle threat of streaming rivals

Foxtel CEO Richard Freudenstein at today's announcement

Foxtel CEO Richard Freudenstein at today’s announcement

CEO of Foxtel Richard Freudenstein has today announced the company is going to slash its prices for new subscribers and rework its offerings as it seeks to combat the entry of new cheap online streaming services to the market.

Speaking at the ASTRA Conference this morning the pay-TV boss said the company is set to halve the price of its basic package from $50 to $25, telling the audience he is “absolutely confident” the new pricing structure will drive a subscriber growth and a “seismic shift in the Australian media environment”.

“We will significantly reduce the price of our entry package so all the people who have long wanted Foxtel, but didn’t think it fitted their budget, will look at us again,” said Freudenstein.

“The biggest opportunity lies in growing our cable and satellite offering. Today I’m going to talk about a new strategy that we are confident will see a major lift in Australian homes.“We have two pronged strategy, launching on November 3, that we believe will result in a seismic shift in the Australian media environment.”

In recent years Foxtel’s penetration in Australia has stalled at around 30 per cent of households, with factors including a lack of exclusive premium sports content and high cost for premium dramas and movies cited as barriers to growth.

However, the “triple play” offering of a bundled TV, internet and phone line subscription, which had been set to go live before Christmas, is now not expected to be live until the first quarter of next year.

Today’s announcement saw one of the biggest revamps of the pay-TV operator’s pricing and packaging in its history, along with the company providing new details on its iQ3 and triple-play strategies, as well as a reworking of the Foxtel OnDemand online service, which is being renamed Foxtel Anytime.

“Last year a good proportion of our subscriber growth came from IP (internet based) products. Growth in our IP offering is an important part of our strategy – there is a significant segment of the population who really value the flexibility of these products, for example they may be relatively light TV watchers or they may be highly mobile.

“There are many reasons why Foxtel does not suit some people and we want to be sure we have something which meets their needs.”

In an attempt to drive new consumer uptake of Foxtel, Freudenstein said the entry level price would drop from around $50 a month to $25 with the Sports package moving to $25 as well, meaning many sports fans could access the pay-TV for $50 a month. However the company has restructured its packages moving some of the more desirable channels including Soho, FX and Lifestyle You into bolt-on premium packages.

Freudenstein said the changes would also reduce churn among existing Foxtel subscribers as they experienced the cheap price and new content offering.

“We will be significantly increasing the value we offer our existing loyal customers in a way that we believe will further reduce churn and increase advocacy,” he said.

Click to enlarge

Click to enlarge

“At $25 for our high quality entertainment pack plus the ability to add an additional tier for a total cost of $35 to $50 or two tier for $50 to $70, plus the convenience of all Foxtel’s amazing technology, I am absolutely confident that many more Australians will come to see Foxtel as great value and a must have service.”

In a move that will be seen as an attempt to counter subscription video on demand platforms such as Netflix and Streamco, both of which are expected to launch in Australia next year Foxtel also signalled a new enhanced content offering today announcing a new channel Foxtel BoxSets while rebranding catch up service Foxtel OnDemand as Foxtel Anytime.

The channel will offer subscribers live and anytime access to some of the most popular programming available from the subscription service such as Game of Thrones and House of Cards.

“We are massively growing the range of content on demand so that we now offer customers more than 2,500 hours of free on demand content,” he said.

“More recently we have renamed our catch up and free demand service as Anytime and this week our paid on demand service was rebadged Store.

“We continue to invest heavily in original Australian content across all genres – powerful dramas like Wentworth, Devil’s Playground and the Kettering  Incident make Foxtel famous for challenging provocation story telling that you won’t find anywhere else.

“I want Foxtel to be known as Australia’s equivalent of HBO.”

It also said it would strengthen its high-definition offered across all of its premium content packs by adding nine new HD channels to its HD channel pack.

Nic Christensen 

Updated 4pm: 

Following questions from readers Foxtel has clarified existing customers can either choose to stay with their existing packages, or switch to the new pricing structure and choose which packages they wish to have at the new prices.

Existing customers will have extra channels thrown into their subscriptions: for example people with the Drama package will now have Showcase and the new Box Sets offering in their package for no extra cost, whilst Movies and Platinum subscribers are being offered one or two free pay-per-view movies each month.

Letters are being sent out to existing subscribers in the next few days detailing the offer, and the changes take effect from November 3.

The Fuel and Speed channels in the Sports package have been replaces with Fox Sports 4 and 5.

Foxtel’s new pricing packages: fotel

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