Foxtel picks up the pace with 4K

Foxtel CEO Patrick Delany has vowed to step up the pace of product launches, buoyed by demand for its 4K service.

Foxtel CEO Patrick Delany in his office in Sydney. Picture: James Croucher

Foxtel’s chief executive Patrick Delany has vowed to step up the pace of product launches and tech­no­logical innovations, buoyed by strong demand for a new ultra-high definition 4K service.

Unveiling a refined strategy to reinvigorate Foxtel, Delany has committed to giving subscribers better value for money as part of a strategy to reduce the subscription television provider’s churn rate.

It comes as Delany, who has led the satellite, cable and streaming company since January, pushes through Foxtel’s first price rises in more than two years to partially offset increased investment in content and new platforms including the launch of Fox Cricket, a dedicated 24/7 cricket channel, on September 17.

Foxtel’s basic entertainment package will rise by $3 to $29 a month, while its platinum packages will increase by $2 to $139 a month, effective October 1.

Foxtel is making Australian television history by launching the nation’s first 4K ultra high definition channel in October via a brand new iQ4 set-top box.

A new phase of investment in Foxtel has been made possible by this year’s merger with Fox Sports.

The Australian’s publisher News Corp owns 65 per cent of the combined entity, with Telstra holding the balance.

When the merger was completed in April, executives said the move would herald a “new era” in Australian broadcasting, 23 years after Foxtel launched with the now-famous “I want my Foxtel” ad campaign featuring animated screen hero Bart Simpson.

Now, the broadcaster will offer subscribers picture resolution that equates to about four times the pixels of 1080p high definition. Airing a mix of marquee concerts, movies, documentaries and sport — including cricket coverage from November 4 — the 4K channel will deliver 20 times the resolution of the standard definition broadcast seen in The Simpsons all those years ago.

Customers will have access to the 4K channel, delivered to compatible 4K TVs through the new iQ4, at no extra charge. It is the only guaranteed way to watch the crisp images in Australia, Foxtel says.

News of the satellite-delivered 4K channel fuelled a surge in new customer sales — a rise of 30 per cent in the weeks following the August announcement, according to internal figures provided to Media.

Nearly 5000 existing customers contacted Foxtel to request an upgrade to the more advanced iQ set-top box — up 85 per cent on the previous week.

Foxtel said iQ4 upgrades were tracking 13,200 ahead of budget, more than double the average weekly-run rate for the 2018 calendar year.

The pick-up in demand has also been driven by recent marketing activity to support Fox Cricket. These bright spots underscore how Foxtel is “keeping pace” with innovative widely admired rivals such as Netflix, Delany says.

“4K marks the latest rebirth of Foxtel. We have wanted cricket for 23 years. We have never had a big mainstream summer sport before. If you think of the sports calendar like a train, no one now needs to get off.

“It’s great for our subscribers and good for us from a business driver perspective. We won’t get big churn and can now sell into the summer — you will see the temperature boil up on our marketing as the cricket season gets under way.”

Delany’s mantra is that selling TV subscriptions is “only half the story, but “retaining subscribers” is paramount in a world of on-demand streaming.

Foxtel executives say he obsesses over customer losses. Mirroring his time at Fox Sports, Delany has focused on improving customer service and “keeping Foxtel’s [2.8 million] subscribers loyal” with new services, many of which come at no extra cost.

“You will see Foxtel adding more value to subscribers on a more frequent basis, even ­monthly. We really want to make sure our subscribers see the value in subscriptions.

“All of these innovations require investment — bolstering the value of our premium service is the way forward.”

Building on previous efforts to segment the market, Delany is continuing to develop low-cost offerings in the face of heightened competition from Netflix and Stan, a joint venture between Nine and Fairfax Media.

The ability of consumers to find content in new ways — and the spending power of companies such as Netflix — has also prompted a revamp of Foxtel’s movies offering.

A new video on-demand movie streaming service, FoxFlicks, has been launched at no extra cost to subscribers signed up to the movies package.

More than 1000 of Foxtel’s premium on-demand titles from all six major Hollywood studios are available to stream, including first-run deals to screen movies.

A recommendation engine links to the Foxtel Store, allowing access to thousands of new release and catalogue titles to rent on a pay-per-view basis.

“Our positioning is unequivocally premium. Foxtel is a service at its best when you have everything,’’ he said.

“If you love TV, and you’re a younger or older family, and you want an entertainment investment, this is the one because you can share it or take it apart for your own guilty pleasure as an individual.”

Additionally, mobile streaming app Foxtel Go is being revamped with extra features and portability.

Foxtel Go will stream in high definition both live and on-demand, and multi-room subscribers can use Chromecast and AirPlay to cast programming to the big screen.

Delany says Foxtel will also continue to license the best programming from US pay-TV providers, such as HBO. Premium drama channel Fox Showcase will be relaunched on September 26.

While Delany is rapidly developing new digital streaming services, he is pragmatic about the future of Foxtel’s core satellite and cable services as the US industry is impacted by viewers cancelling their TV subscriptions.

The US and Australian markets are different, Delany points out. Subscription-TV penetration in the US is very high, while Foxtel is present in just under one-third of Australian households.

“We don’t have a preference for satellite over any other form of delivery. We want our customers to choose how they want to watch Foxtel. We aim to give customers what they want and need, while being ahead of the trend.”