TPG getting into Pay TV with Foxtel

Foxtel and TPG recently announced an unprecedented licensing agreement. Foxtel has agreed to license some of it channels to cut-price internet services provider, TPG Telecom. TPG had earlier announced their decision to launch a premier television service in 2015 but had not specified how they were planning to source the content.

TPG claims to have the technology required to broadcast television for a long time. Sourcing premium content was the missing piece of the puzzle. The licensing agreement with Foxtel now gives them access to premium content, enabling them to be serious contenders in the triple play battle to take TV, Internet and Phone services to consumers. Foxtel had earlier announced their plans to launch triple play services in 2015, by selling television, internet and phone services together.

Some believe it is a rather bold move by Foxtel, since it can potentially set up TPG as a direct competitor. However Foxtel has a steady footing. The content licensed to TPG is “white label” version of Foxtel’s entry level content offerings. In essence, TPG’s services would be similar to Telstra’s T-Box offerings.

Telstra themselves bundle products with Foxtel vial their Foxtel on Telstra packages, which is not a surprise given that they hold a 50% stake in Foxtel. iiNet, Optus and other major internet service providers source their television content from Malaysian FetchTV. Apparently TPG did consider the option to become a FetchTV reseller, but finally decided against it, preferring to partner with Foxtel instead.

This partnership also gives Foxtel the opportunity to leverage some of their low cost content and grow their viewership via TGP. Coupled with Foxtel’s earlier announcement to slash rates by half from November, and their moves to consolidate more premium content, Foxtel looks to gearing up for serious growth.

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