Foxtel boss Patrick Delany says the return of key sports competitions has led audiences back to streaming service Kayo and helped drive a rise in subscriber numbers at the pay TV company.
Mr Delany told advertisers at a sports presentation on Tuesday Kayo now has more than 600,000 paying users, bringing total sports subscriptions for News Corp-controlled Foxtel to nearly 2 million.
“We’ve gone from really big lows to great highs. As we sit here today we have more sports subscribers than we’ve had in 25 years,” Mr Delany said. “[Kayo] is now sitting at over 600,000 paying subscribers which makes it one hell of a sports platform especially when you add it with the Foxtel premium platform, we now have close to 2 million sports subscribers.”
Foxtel’s subscriber base was 2 million as of June 30, a fall of about 200,000 from March, and its average revenue per user was $78. Commercial, which is predominantly made up of pubs and clubs, fell from 264,000 to 86,000 in the three months to June. On May 2, Kayo had just 272,000 paying subscribers. Foxtel’s new entertainment streaming service Binge, which launched in May after Foxtel secured a new deal with WarnerMedia, had 185,000 paying subscribers as of August 4.
The growth in subscriptions follows a difficult year for Foxtel, which slashed more than 300 jobs and spent a large amount of time renegotiating its broadcast deals with sports codes including the AFL and NRL (free-to-air broadcasters Nine Entertainment Co, owner of this masthead, and Seven West Media also secured reductions).
News Corp said at its latest earnings result Foxtel would save $180 million over three years from the renegotiated deals. But the suspension of sport caused by social distancing restrictions related to the coronavirus pandemic led to high levels of audience churn for Foxtel, which has a large number of subscribers that buy it for match coverage. Mr Delany said unemployment levels and the closure of pubs and clubs also affected subscriber churn and revenue.
Foxtel, which is also partly owned by Telstra, introduced a range of initiatives to cope with churn during the period including making channels such as drama, entertainment and reality available at no extra charge for new customers or those who didn’t have packages. It also made the movie package free to sports subscribers until June 30.
“Ad sales completely crashed as clients withdrew, were cautious and waited to see,” Mr Delany said. “We had no choice at the Foxtel Group but to double down on transformation which meant finding new ways of being more efficient, moving towards digital and focusing on our partners – the NRL, AFL and Supercars to work out how we could get their seasons back on the field.”
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