Report: Netflix, Foxtel tie-up carries opportunities for both

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Ahead of a tie-up announcement, research from Roy Morgan shows 13.355 million Australians now have access to either Netflix or Foxtel via a household subscription to either service equivalent to nearly two-thirds (64.4 per cent) of all Australians aged 14+.

Analysing the two services separately shows 11.5 million Australians now have a household subscription to Netflix whereas around 5 million have a household subscription to Foxtel and 3 million have access to both Netflix and Foxtel.

Of the 13.355 million subscribers to either service a majority of over two-fifths (62.6 per cent) only have access to Netflix equalling a market of 8.4 million Australians. A further 23 per cent, or 3 million, have access to both Netflix and Foxtel and the remaining 14.4 per cent, or nearly 2 million, only have access to Foxtel.

Michele Levine, CEO, Roy Morgan, says the tie-up between Subscription TV giants Foxtel and Netflix set to be announced on July 24th carries opportunities for both: “Foxtel and Netflix are undoubtedly the two giants of Australian Subscription TV and the plan for Foxtel to provide Netflix through the Foxtel IQ box set to be announced tomorrow carries significant opportunities for both services. Enabling the 5 million Australians with household access to Foxtel to view the streaming service through their Foxtel IQ box is a solid defensive measure to help prevent existing Foxtel subscribers ditching the service to move to cheaper alternatives and provides an extra incentive for new users to sign up for Foxtel.”

“The proliferation of cheap streaming video services led by Netflix in recent years has provided the biggest challenge yet to Foxtel’s traditional business model and there are more cashed up competitors on the way. Nearly 3 million Australians already watch the Australian-owned Stan and services including Amazon Prime Video and YouTube Premium are growing quickly. “he more Foxtel can be regarded as the ‘gateway’ to video content from the likes of Netflix, and perhaps other rival services in future, the more access Foxtel will gain to detailed user data metrics that will help them tailor their services, and advertising, to individual viewing preferences and the more valuable their service will in turn be to advertisers looking for an audience,” she added

“Although we’re not able to fully judge the mechanics of the partnership given we can only guess about the exact plans to be outlined at tomorrow’s announcement the speculation is that the Netflix service will be available via the Foxtel IQ box with an additional fee. There could also be a discounted, or ‘free’, period to access Netflix via Foxtel for new Foxtel subscribers in an effort to drive new subscriptions. “For Netflix the ability to link up with Foxtel’s News and Sport services and be a frictionless option for the 2 million Foxtel viewers who don’t currently access Netflix is an opportunity for growth in a market which may be reaching maturity. Netflix’s June quarter 2019 results showed a net loss of subscribers in its home market of the United States for the first time in eight years,” Levine concluded.


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