Foxtel Group outlines streaming-led growth strategy
News Corp Australia and Telstra-owned Foxtel Group has provided an update to the market today, flagging streaming as the source of its future growth.
The update confirmed that growth will be driven by streaming, currently through its fast-growing streaming services, Kayo Sports and Binge, and the opportunity for further growth through its recently announced live news aggregation streaming service, Flash.
Foxtel Group also revealed a transition to a streaming-led future for Foxtel Retail following the recent launch of the iQ5 plug and play IP set top box.
This transition, designed to strengthen Foxtel’s subscriber base and revenue, includes a future as a streaming aggregator of Foxtel’s content along with integrating a broad range of local and global streaming apps. This transition will be boosted later this year with a software update that will allow its popular iQ4 set top box to be IP-only, without the need for satellite.
The implementation of the Foxtel Group strategy will form the basis of its new new three-year ambitions, including reaching five million plus subscribers, having reached four million total subscribers in FY-21, one million higher than 12 months prior.
Approximately $3 billion in revenue is expected, with continued opportunities for margin expansion supported by streaming revenue growth, continuing to slow the decline in residential broadcast revenue and ongoing cost transformation through digital growth and operational efficiencies.
A capex to revenue ratio of 4%, having fallen from 14% in FY-19 to 7% in FY-21, to help underpin the group’s continued strong cash performance of $274 million in FY-21 (EBITDA less capex).
News Corp’s streaming video on demand (SVOD) services saw growth of US$188 million, or 10% growth for the financial year ending 30 June, 2021.
That was driven by a significant increase in Foxtel’s paid subscriber numbers, which increased 40% to 3.891 million, largely fueled by growing numbers on Binge and Kayo.
Foxtel Group chief executive officer, Patrick Delany, said: “Our strategy briefing highlights today’s Foxtel Group is a very different company to the one-product Foxtel of three or four years ago.
“The business has been repositioned as a technology-led streaming company with multiple sources of revenue growth from streaming, a strengthened Foxtel Retail offering and growth in digital advertising.”
