Optus EPL will see Foxtel lose subscribers and opens door for likes of Youtube say buyers

Optus’s swoop for the English Premier League (EPL) is a major “land grab” that leaves Foxtel facing the possibility of losing subscribers and opens the door to players like Youtube to bid for rights, according to senior media buyers.

FoxtelYesterday’s deal sees Fox Sports lose one of its only franchises which viewers cannot access on another platform, leading some buyers to express concerns hundreds of thousands of subscribers could be lost from the pay-TV platform should Optus decide not to on-sell the broadcast rights to it.

“With the dog’s dinner that is the ongoing NRL negotiations and the recent loss of the Champions League, by ESPN, it highlights just how competitive the world has become for Foxtel,” said Chris Walton, managing director of Nunn Media Sydney.

“They are now being squeezed on the one side by traditional networks who need the value live sport brings and on the other by non-traditional broadcasters who have got deep and direct relations with their own substantial customer sets.”

Foxtel yesterday declined to comment on the prospect of losing subscribers.

“This is big,” said one media agency CEO who declined to be named. “It will cost Foxtel on the subscriber front as the EPL was the main thing holding a whole lot customers to their $100 subscriptions. Now that’s under threat.”

OptusOther industry sources noted the move comes at a time when Foxtel is increasingly being challenged on multiple fronts: it has lowered its entry price and added flexibility to its packages – a move it weakens its average revenue per user (ARPU). It is also facing increased competition both in sports rights and from free-to-air channels via streaming and their offering.

Just last week Nine Entertainment launched a new channel 9Life, a move widely interpreted as an attempt to challenge the pay-TV’s audience in the real estate and reality TV space.

“Foxtel has two unique audiences it has enjoyed who are not there for the breadth of content but special interest,” said one industry source. “One is there simply to address TV reception issues – which will be challenged by the free-to-air streaming services – and the other is your EPL audience which attracts a very large and passionate group who will move their business elsewhere for that single property.”

Fox Sports yesterday put out a statement saying it was “disappointed” at the loss, although EPL ratings are down 29 per cent on this time last year.

Many media buyers were reluctant to go on the record about the risk to Foxtel’s subscription TV audience, which comes at a time when the pay-TV operator is under pressure over its refusal to be transparent about subscriber growth after choosing to combine high margin pay-TV subscriptions with the low margin SVOD subscriptions to Presto in its last financial results.

However, all noted that the move would have a major impact on the media landscape.

Chris Nolan CEO of Starcom Mediavest, which has Optus among its clients said: “This is very progressive step by Optus, these rights are a further strategic step towards the companies multimedia strategy as an entertainment brand”.



While Simon Ryan CEO of Carat said the EPL with its expensive price tag was a “big bet” that would impact ratings on Foxtel .

“It’s a big bet and certainly a big land grab that will effect ratings,” said Ryan.

“It will be interesting if they try and on sell to Fox Sports as without it you could see a lot more streaming based major content acquisitions. This is a very significant major sporting rights pillar in the Fox Sports stable.

“This this will also open up the opportunity for the likes of Youtube to go for other big content distribution opportunities.”



Nunn Media’s Walton said the move was another sign that the media world had shifted.

“What is interesting is it shows how the world has shifted – it used to be that digital/mobile rights kind of came along for the ride as an add on to broadcast rights.  Now the reverse seems to be the case with Optus keenly eyeing the mobile streaming rights with less said about what is going on with broadcast,” said Walton.

“I think it raises as many questions as it answers so we can be sure we will see the broadcast side of things continue to evolve in the near future.”

Nic Christensen 


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