As 2017 drew to a close, news outlets excitedly reported that a big change was coming to Foxtel – the merger of Foxtel itself with Fox Sports, which provides multiple channels of live sporting action from Australia and around the world. But you may ask, isn’t that like Foxtel merging with itself? Actually, no. And the implications of this merger are likely to have an impact on sports fans everywhere, as the pay TV platform gears up to compete with the arrival of sports streaming services.
Since its launch in the 1990s, pay TV market leader Foxtel has been a 50-50 joint venture between Telstra and Rupert Murdoch’s News Corporation – something that worked out brilliantly, especially in the early days. Foxtel took care of the programming, while Telstra handled the delivery of the Foxtel signal to homes via the cable network they set up for that purpose. But times have changed.
The rise of Netflix, Stan, Amazon and other streaming services has put a pressure on the entertainment side of Foxtel. And with streaming now a mainstream concept rather than a niche market, many sporting codes (such as Formula One) are looking to get in on that action. Thanks to Fox Sports, Foxtel has, for years, offered unparalleled sporting coverage of a vast range of sports and codes. It even has exclusive rights to some of the biggest with the AFL, NRL, Formula One, and V8 Supercars, amongst them. For the committed sports fan, there’s no better smorgasbord of live sports action than the set of channels Foxtel provides. Best be sure that they intend to not only keep it that way, but to grow their sports coverage even further.
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To do that successfully, the merger came up as a logical thing to do. It’s not a traditional merger, either. News Corp’s stake in Foxtel will rise to 65% with Telstra, having sold its cable network to the NBN and with Foxtel moving more and more to satellite delivery, looking like being involved more on a retail level (including selling Foxtel through its stores). Fox Sports is 100% owned by News Corp and now, the Murdoch-led company will have a controlling stake in Foxtel as well.
Meanwhile, Fox Sports will go from being a company that licenses sports coverage to Foxtel, to one which co-owns the network itself. That makes expansion of sports coverage on Foxtel look extremely likely, as the pay TV company – headed by a new CEO – starts to focus on the side of its service that nobody else can deliver. Eventually, Foxtel will float on the stock market as well.
We’ve already seen some preliminary happenings over the past few months even though the merger hasn’t been signed, sealed, and delivered just yet. These include several non-sports channels disappearing from Foxtel, which of course has the handy side-benefit of providing more space for new channels to come in and join the existing ones. Foxtel has also been aggressively marketing their sports package ahead of the opening of the 2018 NRL and AFL seasons, at a price designed to attract new customers and keep them sticking around (and from all reports, it’s been working).
You’re also likely to see extensive coverage of Foxtel’s sports in News Corp’s daily newspapers. Fox Sports is still eagerly searching out the rights to new codes – the strong rumour being that “Big Bash League” cricket is very much on the radar – as free-to-air networks start to reel in the huge amounts of cash they’ve been handing over for sport coverage. “Anti-siphoning” laws mean that we’re a long way away from seeing sports like AFL exclusively on Foxtel. But with their multiple channels, high production values, and ability to run sport coverage without ad interruptions, there’s likely to be many codes that would love to find a home on a revitalised, sports-focused Foxtel.
This is all happening against a backdrop of increasing threats to Foxtel from other streaming services, which you can bet a lot of sporting codes are very interested in. Yes, there’s the possibility of Amazon signing up local sports for its Prime Video service (they already stream US NFL football and ATP tennis), but the real threat is likely to be the individual codes setting up their own, dedicated streaming platforms, something already popular with some sports in the US.
That isn’t likely to play out the same way as Netflix did, though. You can expect the price to subscribe to any of those services to be fairly high and if you’re into multiple sports, it all starts adding up very quickly. Foxtel’s big advantage is the breadth of their coverage – not to mention the rights to key sports that they have sewn up for years to come. Getting access to a world of sports for a modest monthly price is likely to look even more appealing in the face of the alternative, which is paying many times as much for a suite of individual streaming services to keep up with your favourite sports.
The future’s looking very interesting for Foxtel. And if you’re signed up for the sport – as a huge number of Foxtel customers are – then it’s safe to say the future’s looking very bright. Expect to hear a lot more about this, and eventually see more changes to Foxtel itself as the year goes on.