Foxtel ‘highly likely’ to be a streaming only business in the future: Mark Frain
Four years ago, under 10 percent of Foxtel’s customer base was streaming customers, with that number now approaching the 70 percent mark.
Speaking to Mumbrella for this week’s Mumbrellacast interview, Foxtel Media CEO, Mark Frain said the media company, majority owned by News Corp, has undergone “quantum change and quantum acceleration” in recent years in its streaming capabilities.
Foxtel Media’s Frain
With 4.4 million subscribers now, three million of which across the company’s streaming services (Binge, Kayo and Flash), Frain said it’s “highly likely” the company could see itself as a streaming-only company down the line.
“If you look at the destination we’re on, it’s kind of highly likely in the future,” he said.
The company’s broadcast customer numbers are in freefall in recent years, with News Corp’s most recent financial results showing a drop of 151,000 across residential and commercial customers between 31 December 2021 to 2022.
With Kayo subscribers again stagnating over the off-season for winter sports, Binge’s continued growth has helped the company, with the platform reaching a high point of 1.375 million paying customers, the company told Mumbrella today.
Foxtel crucially secured a new deal with Warner Brothers Discovery this year, ensuring several more years of HBO content, which has been a key driver of the company’s subscription strategy since Binge’s launch in 2019.
With the launch of HBO Max globally on the cards, there remains no concrete plan for a local launch of the service locally, which has been quashed by the company following recent reports in the media, though on the podcast, Frain declined to comment further on it.
Frain said from an entertainment perspective, streaming services are continually reliant on “big shows and big ticket items” that you can market and advertise to the customer base, as Foxtel has done with the likes of House of the Dragon, and Succession, which is currently airing in its final season.
HBO’s House of the Dragon proved a smash hit for Foxtel
“The peaks you get from that kind of content, I think the critical piece is continually having enough of those hits to keep the customers in there and that’s the battle with the entertainment streaming landscape, which is highly competitive.”
On the other hand, the company’s streaming service appears to be increasingly reliant on its two key winter sports codes, the NRL and AFL to drive and maintain a subscriber base, with declines across both Q1 and Q2 in the 2023 financial year.
Though with new long-term deals for both codes locked up, Frain said there is increasing confidence around the core sports to “hold those customers in” into the future.
Frain echoed previous comments made by Foxtel CEO, Patrick Delaney, that in such a competitive and fast-growing category, such as the SVOD [subscription video on demand] industry, “some consolidation is inevitable moving forward”.
“I do still think in the Australian market, there’s still more players to come, a blend of AVOD and SVOD platforms,” referencing the success of Fox Corp-owned AVOD [advertising-based video on demand] service, Tubi.
“So it shows firstly, if the content’s there, the customer experience and the technology is there, that the customers will come if the value equation is correct. Whether that’s a blend of ads and subscriptions, whether that’s ads only, there’s still a lot more growth to come in that sector.”
“So we’re probably a while away from consolidation yet, but like in a lot of these fast-growing markets, as I said, there’s a level of inevitability there at some stage.”
The full interview with Foxtel Media’s Mark Frain can be found on this week’s Mumbrellacast at the 26:53 mark.
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Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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Its inevitable. User Experience needs to continue to be prioritised if Foxtel want to hold onto these streaming subscribers and not limit functionality on certain hardware
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