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
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.
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“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: 
And the say competition doesn’t work…
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The reason no one who’s serious about an online TV proposition takes Foxtel seriously is because they still have no HD offering for Foxtel Go/Anytime or whatever they want to call it now.
The simple fact is that other suppliers are going to impact Foxtel’s market share (and, frankly, have been for years, for those savvy enough to have a USA based VPN) because Foxtel has completely ignored the simplest of demands from potential subscribers. I had a Foxtel subscription for 14 years and finally cancelled it when I was tired of not getting what I wanted.
They complain about the high piracy rates of things like GoT — personally I would happily pay for HD streaming of it. But $50 a month for lower quality than you can get for free from piracy sites? I don’t advocate it, but it’s really not that hard to put 2 and 2 together.
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The article says “the previously premium Shocase offering, which includes the first run of all HBO dramas like Game of Thrones and Boardwalk Empire, will be free to basic package subscribers”, but the graphic suggests Showcase is part of the Drama package.
Clarification?
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According to that guide, Showcase is not included in the basic package and is still $20 extra.
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Hi James and JH,
While that’s what the chart says the press information states: “and giving all Essentials customers, who don’t currently have it, access to Foxtel’s award winning premium drama channel – showcase, the Home of HBO.”
I’m seeking clarification from Foxtel at the moment – stand by.
Cheers,
Alex – editor, Mumbrella
You still can’t pick and choose what channels you want. This is why Foxtel is dead in the water within 5-10 years.
Listen up Foxtel. I’d be willing to pay $25 a month for a package that let me select 10 channels out of your whole selection.
All i want is FOX8, ESPN, ESPN2, Comedy, SyFy, E! (For the wife), TVHits, Universal, Arena and Showcase.
It’s not that hard! until then I’ll be using “other” means to watch the content i want.
Yaaaargh me hearteys!
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@but. It would take all day to watch a any IP delivered TV show in high def. That’s why it’s reserved for either cable, satellite or the occasional broadcast TV show. You’ll be waiting a long time for your HD streaming!
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Where has Fuel TV gone? I can’t see it on the diagram …
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There is a new drama tier, so find it very unlikely Showcase would be excluded from that given FX and Soho have moved from Basic into same tier………
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Looks like they are replacing Fuel and Speed with Fox Sports 4 and 5 as well?
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Does this impact current subcribers – or is it just for new customers. under this structure my monthly charge would drop $19.
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And it’s only for new customers – which means existing customers will not be rewarded for their loyalty.
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I would say the Essentials pack is significantly weakened by the subtraction of FX, SoHo and Lifestyle You. A lot of popular stuff is in there. The additions are largely worthless. You get what you pay for – they should be upfront about that.
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“and giving all Essentials customers, who don’t currently have it, access to Foxtel’s award winning premium drama channel – showcase, the Home of HBO.”
Sounds like they will give Showcase to current customers paying $50 a month for ‘free’ while new customers have it as a $20 option.
If it’s included in the $25 basic plan, I’d sign up, but not if it’s an extra $20/mth.
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Slashing prices and more premium content my arse!
On the new package break up I lose FX, SOHO, Cartoon Network, Nickelodeon & Disney (premium content) but gain Disney Jnr & Nick Jr and a few music channels and a Thoroughbred Racing channel for a total saving of $19 a month.
So to get the channels back we actually watch we have to pay an extra $30 a month and amazingly Foxtel is $11 ahead.
Looks like the normalannual Foxtel gouge to me.
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While you’re talking to Foxtel, Alex, can you please ask them if they have any plans to reduce (or preferably eliminate) those interminable house ads that pop up every ten minutes?
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Are exisiting cuxtomers going to get a reduction in monthly premiums?
If not, do we need to unsubscribe & they join up again?
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While I welcome the price drop it suggests they were price gouging us all along. They also have a long way to go before being in the same ballpark as HBO
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if they dont pass on the new prices to existing subscribers i am leaving. foxtel never rewards loyalty or current customers.
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Hi guys, I’ve put the questions to Foxtel’s spokesman and, in a nutshell, this is the situation with the new packages:
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.
Hope that clarifies.
Cheers,
Alex – editor, Mumbrella
The pricing applies to current customers, but you have to call and ask them for it – they won’t migrate you automatically.
I cancelled my $134 full package last month, but kept the IQ box ($10 a month), and use it for recording and playback of free-to-air. Add Apple TV, and a Netflix and Hulu subscription ($8 each a month), and I’m saving a fortune and hardly miss Foxtel. And, if you know someone with a subscription, you can get their login details and watch it online still 🙂
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To clarify the showcase channel. Existing customers who don’t subscribe to movies will now get access to showcase at no additional cost, instead of having to pay $20+ for the movie package just to watch GoT
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No more Fuel or Speed and still no rugby channel. But the AFL mob still get their sport 24 hours a day including Boxing Day when all the media is obsessed with cricket and a yacht race. Also still no way of selecting specific channels and only paying for them rather than having to pay for a whole sea of channels you don’t want and will never watch. If Foxtel don’t cut a deal with Seven and the IOC for eight channels of coverage of the next summer Olympics I won’t be bothering with them for at least the next six years.
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o k reduce our fee to $25 and we stay. Don’t even think of ripping us off..the present programs are repeats and fucking old. DO IT!!!
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Dead company walking.
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I dont have to ‘subscribe’ to watch a movie at the cinema, nor freeview TV, nor to download movies from a variety of sources.
Dear Foxtel, I do not do contracts.
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The problem with pricing adjustments at this scale is that they expose the fact you’ve been price gouging. Foxtel will only survive by keeping sports exclusively, maybe…
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@AJ Also Australia’s most profitable. Doesn’t say much for the rest.
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Foxtel needs to get scale or it will be killed. It was compromised by packer and murdoch at the start. Telstra needs to take the lead now.
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@lover of TV and film. Then you would love either Foxtel Play or Presto.
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Hi All,
What pisses me off is prior to the take over of Austar by Foxtel you could delete or add to your package online, however after the takeover I discovered that whilst I could add extra channels online, if I wanted to delete a package, e.g say “Sports”, which I was only using during the NRL season, I had to call Foxtel to request the deletion. Also with the Austar satellite service, the TY Guide was taking at least 10 secs to come up after pressing the button, whereas on my sons Foxtel satellite service, as soon as you press the button, the TV Guide comes up, however following the takeover by Foxtel, it is still taking 10 secs or more for the TV Guide to come up, therefore they must still be using the old Austar platform.
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I cancelled last week after 16 years. I was watching a doco the other weekend, but had to switch off because of the constant ad breaks full of repetitive promos. I just find there are too many other tempting offers, and new technology around the corner, to keep on forking out for channels I don’t watch, and ad break after ad break – even though I’m already paying a subscription fee! Thanks for the memories Foxtel.
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True Geoff. I will only watch non-live sports shows on IQ so I can forward thru the ads
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if it wasnt for live sport foxtel would be dead already i think. wonder what % of subsribers add sport to their package? i am thinnking 80%
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Foxtel wake up and give people the choice of which channels they want to view not which packages you want to force onto consumers ! And also keep this choice that people want cheap; the less the cost the more people you get on board ! I haven’t ever taken on a foxtel subscription and I never will until you do the right thing by customers !
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