Foxtel hikes subscription costs by 11.5%

Josh McDonnell
By Josh McDonnell | 4 September 2018

Foxtel is set to increase the cost of its basic service by 11.5% as of next month, as the subscription TV service continues to invest in its “premium content offering”.

The hike in the price impacts the basic 'entertainment' package, which includes channels such as Fox 8, MTV and BBC UKTV by $3, and takes the monthly price from $26 to $29.

Foxtel will also increase the costs of its platinum pack by $2, which includes all channels and services, taking it to $139 a month and its sports package by $4, to $29 a month.

The decision follows the $1.2 billion investment made by the pay-TV company and free-to-air network Seven, to purchase the rights to broadcast the cricket from previous holders Nine and Ten.

The business has also announced that it will be making a raft of further investment into its business over the next six months, with Foxtel CEO Patrick Delany previously stating to "expect further investment" into its premium content offering.

Since then, Foxtel has unveiled a new movie streaming service, FoxFlicks and the upcoming addition of Australia's first dedicated 4K resolution channel.

Foxtel CMO Andy Lark, who joined the subscription TV service previously told AdNews the business was going through a “transformative period” and now had to have a different market proposition.

“My approach is you've got to balance the need to deliver in the short term with the more fundamental issues of rebuilding the brand and recreating a category, and this is what we are ultimately working towards," Lark said.

The last time Foxtel raised the cost of its basic service was in 2016, increasing it by $1.

Prior to this, Foxtel cut the cost of its service almost in half from $49 down to $25 before the entry of Netflix into the Australian market.

Netflix also slugged users with price hikes over the past 12 months, including the Australian market, which saw prices go up across all services by $AU 2.00.

The threat of streaming has also been top of mind for Lark and his team, however, he says “the future of Foxtel is not just streaming”, but is also about creating a premium content proposition that applies to all areas of TV viewer, at home, mobile and digital.

He says the challenge is to ensure customer longevity and loyalty, adding that these are areas where streaming services can “fall over”, while Foxtel has multiple content categories that ensure subscriber renewal.

“There are different streaming services that I subscribe to for a short period of time to get a particular show and then I just cancel because I don't want anything else they've got, that's not uncommon,” Lark says.

“That is radically different than being a premium entertainment service that people want and desire because they want the full spectrum of what you've got to offer.”

A Foxtel spokesperson said:

“Foxtel regularly reviews its pricing, which, from time to time, results in an adjustment.

"Our recent price rise is the first one we’ve implemented for all of our customers in more than two years and ensures we can continue to bring subscribers the best in movies, drama, entertainment and sport, including our recently acquired Cricket rights, while enabling us to invest in how we deliver that experience through the most advanced set top box technologies, which will see 4K arrive in October of this year.” 

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