Foxtel slashes sub prices to $25, could halt 10% audience decline this year and lift home penetration to 40%

Paul McIntyre
By Paul McIntyre | 4 September 2014

Foxtel’s CEO Richard Freudenstein unveiled a radically overhauled subscription offer this morning at the ASTRA conference, slashing entry level pricing to $25 per month along with a host of revamped packages for existing subscribers and new initiatives which the pay TV boss said was a “seismic shift in the Australian media environment”.

StarcomMediavest CEO Chris Nolan, Mediabrands chairman Henry Tajer and OMD CEO Peter Horgan were at Freudenstein’s address and left impressed.

“The key thing we’ve been concerned about is Foxtel has had a pretty significant decline in audience this year,” said Chris Nolan. “Depending on how you look at these things, if you said 10% that would be about right. Fitz [MCN CEO Anthony Fitzgerald] would argue the case but I think it’s about right. What Richard put forward this morning is a very significant improvement in value to reduce churn and increase subscribers.”

Nolan said the way Foxtel had balanced the cut in entry-level subscriptions and offered more value with new content packages for existing subscribers to not “alienate them” was clever.

OMD CEO Peter Horgan concurred. “It’s an impressive response to get match fit for the arrival of IPTV,” he said. “It’s a land grab to become the entertainment hub for Foxtel homes and scale the number of homes where that isn’t the case.”

Mediabrands chairman Henry Tajer said the overhaul made it likely Foxtel would hit a home penetration figure of 40% - the pay TV provider has been stuck around 30% for years.

“Foxtel is at that tipping point where they could start to hover in that 40% penetration over time and that makes them a reshaper of the marketplace,” Tajer said.

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