$80bn USD Fox-Time Warner deal will benefit Ten and Foxtel

Deal means Foxtel Pay TV provider and Ten Network (Freeview) will benefit from a deal between US media giants 21st Century Fox and Time Warner

Last month, Rupert Murdoch’s 21st Century Fox made a $80 billion USD takeover bid for Time Warner (who owns Warner Brothers and HBO). Rupert’s other company, News Corporation, owns half of Foxtel while Rupert’s eldest son, Lachlan Murdoch, owns a minority stake at Ten Network. This means that Foxtel could benefit from this transaction by acquiring even more content from HBO and Time Warner. This is a while away though as current HBO licences to its current international broadcasters excludes content from being viewed in Australia due to exclusivity. It’s more a gain for Rupert’s 21st Century Fox on an US level, as the takeover deal will allow greater premium content in this market by opening up licenses to programs and movies.

Experts like Ms Brownlow, who was with Kerry Packer’s Publishing & Broadcasting Ltd in the past, said that the Fox-Time Warner merger could compete with big online companies like Google, Amazon and Netflix. She also said that Australian media companies shouldn’t worry about deals of this scale because many consumers now prefer to watch news, sport, and Australian drama rather than Hollywood films and US shows which they can get from internet piracy. This is a big reason why US content is becoming less attractive for the local networks.

Perhaps this is why Nine Entertainment is planning to scale back its existing $160 million deal with Warner as the return on premium content is being affected by internet piracy streaming . Without paying for any further new series and movies, Nine could retain the Warner Bros programs it already has for about $80 million a year so there’s a significant cost saving to be had. The only issue with this is that Nine could potentially risk long term gain by missing out on any immediate new hit show. It’s a question of whether they want to see short term gain vs longer term benefit.

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