On the face of it, News Corp (Foxtel) and Seven West Media blinked and bailed on their streaming video joint venture, Presto, leaving the Fairfax Media-Nine Entertainment vehicle Stan as the local winner, but the real streaming service victor is international behemoth Netflix. Presto ended up as the third-placed streaming service behind Netflix and Stan, and it had little chance of moving out of that position as Nine and Fairfax lifted their investment in their service to well over $100 million in 2015-16.
Foxtel (which is managed by News Corp appointees such as CEO Peter Tonagh) and Seven West Media this morning announced that Foxtel would buy Seven West Media’s interest in the Presto and then close it on January 31, 2017. The purchase price was not disclosed, but it would not have been very much.
The deal was done to shut down losses (and will Foxtel’s “more than 2.9 million” subscriber figure at June 30 be impacted?) and to clear the way for the new internet-based service Foxtel plans to start in early December, to be called Foxtel Play. That will have a monthly fee of $10 to $15 a month for a basic package of channels and streaming services. Foxtel is banking on this new product to boost subscriber growth and lower the rising level of subscriber churn from people buying the short-term Presto package and not renewing.
That was driving up costs and cutting revenue for Foxtel, and management are known to have been uncomfortable at the way the Presto subscription packages were eroding the key measure of pay TV income — the average revenue per user (ARPU). The new Foxtel Play product gives the group a standalone streaming product that it doesn’t have to share with anyone else — Foxtel can control the content and still try to drive ARPU higher by forcing subscribers on to longer packages. — Glenn Dyer
I never tried Presto, but I’ve been impressed with Stan since subscribing to it a year or so after subscribing to Netflix.
I’ve actually been watching more of Stan lately, especially since Netflix became militant about closing off access to anything beyond its AU offering. Stan seems better for British TV content and has a broader selection of older movies, to my untrained eye. We’re still watching material on Netflix though, especially its own productions which generally have high production values (we’re in the middle of the excellent ‘Stranger Things’ right now).
As they’re only about $10 per month each, we’re keeping them both on. Not sure how attractive a Foxtel version would be, unless there’s a must-see show there and one can get out of the subscription easily after viewing it.
I got Presto a couple of months ago.
I chose Presto because I have a Telstra wireless broadband service and Presto is unmetered.
I have also tried Netflix, but that quickly depletes my monthly data allowance.
I have been using Foxtel Play for nearly 2 years. Its pricing is in line with Foxtel’s regular subscriber service, so is extremely expensive. It is also unmetered.
Given that Telstra half owns Foxtel it strikes me as being anti-competitive behaviour. Using Foxtel and Presto means that I can use many multiples of my data allowance.
I would have preferred them to have closed Foxtel down, moving the content to Presto and adding a third subscription option – sport.
I’m sure if they had their sports channels available for $15 above the normal Presto subscription price (it is $25 on Foxtel) they would get many more subscribers.
http://www.theage.com.au/business/media-and-marketing/presto-to-shut-down-in-january-after-seven-sells-to-foxtel-20161003-gru8q3.html
“Foxtel will charge at least $15 per month for access to content from HBO, BBC, MTV, Comedy Central and others, or $10 per month for smaller packages. Sports fans will have to pay a further $25 for access to live sports. Accessing Foxtel’s movie collection will cost at least $30 per month. ”
So it is going to be more expensive than Presto ($15 for movies + TV).