Foxtel has two competitive advantages in the Australian subscription television market.
First and foremost, Foxtel’s strength lies in live sports. No other subscription television service can compete with the breadth of Foxtel’s sports coverage, including the AFL and NRL.
Foxtel’s sports offering has been badly wounded by the COVID-19 pandemic, which has shuttered sporting events across the globe and has resulted in an exodus of subscribers from Foxtel.
Eventually, however, the pandemic will subside and sporting events will resume, which should help arrest Foxtel’s subscription slide.
As this happens, another storm cloud is gathering on the horizon.
Foxtel’s second competitive advantage rests with its exclusive rights to HBO content.
Foxtel currently has the HBO rights locked up for the next two years. It is also seeking to leverage these rights into a new low cost streaming service called Binge. Binge will reportedly offer subscribers access to legacy ‘box sets’ of popular Foxtel shows, such as HBO’s Game of Thrones, for the cut price of between $10 and $14 a month.
However, rival streaming provider Stan – which already has the rights to Showtime, Paramount, Starz and MGM – is seeking to muscle in on Foxtel’s turf and bid for HBO’s future broadcast rights:
Television sources said the New York-based WarnerMedia, which owns HBO, has given Foxtel and rival streaming service Stan, owned by Nine Entertainment Co, until early May to formalise bids for popular shows like The Sopranos, Succession, Game of Thrones and Big Little Lies. The deal would also include Warner Bros content and a number of new programs known as ‘HBO Max Originals’ that are set to run on its new streaming service HBO Max in the US.
If Stan is successful, it would deal a mortal blow to Foxtel, which would be left relying solely on its sporting content to drive subscription growth.
Foxtel must also offer a high enough bid price to discourage HBO from entering the Australian market in its own right, having already secured a local trademark.
In short, Foxtel cannot afford to lose the battle for HBO. It’s do or die for Foxtel.
