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Foxtel CEO: “Netflix threat over-hyped”

In an interview with The Australian Financial Review, Foxtel CEO Richard Freudenstein rejected Netflix CEO Reed Hastings’ prediction last year that broadcast TV will probably die by 2030.

“Broadcast TV will continue,” he said. “In the US you will see particularly the main broadcast channels are becoming more and more valuable, it appeals to a wider audience. I think in Australia [where cable penetration is 30 per cent versus 90 per cent in the US] there will be continual fragmentation and Foxtel is taking advantage of that.”

The Foxtel CEO also predicted that audiences will stabilise after Fairfax Media reported that free-to-air linear television viewing in Australia dropped below 90 hours a month for the first time ever, one month after Netflix’s launch.

“There has been a lot of hype around SVoD and clearly some big early numbers but over time people will realise there is a big difference between SVoD and a Foxtel service,” he said.

“I can’t talk numbers [ahead of News’s results] but if you look at our third-quarter numbers, subscribers grew 7 per cent year on year and churn was 10.9 per cent, down from 13.1 per cent in the prior corresponding period. That was just after Netflix launched and you saw very strong growth based on the new pricing model. We are very optimistic.”

Freudenstein also points to Foxtel’s advantages over SVoD, which costs between $9 and $15 a month. “Our research shows a lot of people get it and realise it hasn’t got what Foxtel has,” he says.

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