New study suggests pay TV subscriptions will dip again

A study by JWS Research for The Trade Desk has found that 14% of Australians with a pay TV subscription plan to put it on hold or cancel it as a result of the global pandemic.

The Trade Desk is forecasting pay TV numbers to go down, but Foxtel is still confident

The research found that the group at highest risk for pay TV companies was the 18-34 year old age group where 23% of them were likely to put their subscription on hold or cancel it.

According to The Trade Desk, the shift of this age group moving away from pay TV toward new models of TV consumption such as broadcast video-on-demand (BVOD) signifies that advertisers will have to develop new strategies to reach these consumers.

“We’ve seen the pandemic accelerate consumer and media trends that would have taken years compressed into a few months,” said James Bayes, general manager, Australia and New Zealand, at The Trade Desk. “As a result, the advertising industry is going through a profound transformation that’s changing how marketers think about reaching consumers.

The Trade Desk’s James Bayes

“With 14% of Australian households and 23% of young consumers shifting away from traditional pay TV, coupled with the rise of BVOD and connected TV, advertisers have the opportunity to shift to a more efficient, data-driven approach to reach audiences while being deliberate with every advertising dollar.”

In its Fourth Quarter results report, News Corporation reported: “As of June 30, 2020, Foxtel’s total closing paid subscribers were 2.777 million, a decrease of 12% compared to the prior year, primarily due to lower residential and commercial broadcast subscribers and lower Foxtel Now subscribers…”

The report, however, noted the growth of Kayo and launch of Binge in supporting the numbers. “1.989 million of the total closing subscribers were residential and commercial broadcast subscribers, and the remainder consisted of Kayo, Foxtel Now and Binge subscriber,” the report said.

When asked for comment regarding The Trade Desk study, a Foxtel spokesperson said: “The Foxtel Group’s strategy is to maintain its Foxtel business and grow through streaming. It’s a renewal strategy that is working, returning the Foxtel Group to growth in total subscribers across three platforms, up 11% to 3.1 million subscribers.

“The Foxtel product is positioned as a premium, all in one place entertainment and sports service for Australian families. With around 2 million customers and churn at a two-year low, the service provides advertisers with a slightly older, higher-income demographic, which continues to be particularly valuable.”

Foxtel Media yesterday launched research with Nature that reviewed viewer engagement.


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