Telstra’s half-year report issued yesterday confirms the success it is having with its Telstra TV service. It must be galling for all those bright things at News Corp and Foxtel/Fox Sports that Telstra is proving better at selling subscriptions to Foxtel than Foxtel — especially in the wake of the Presto streaming service debacle and its $100 million-plus of losses, and the loss of well over 150,000, subscribers.
Telstra has built the fastest growing subscription/streaming service in the country with its Telstra TV product. Telstra also has the biggest sports streaming service to mobiles in the country, but ironically is finding it harder, like Foxtel, to drive revenue as streaming video use rises.
From its last three financial reports for the six months to December 2017, the 2016-17 full-year report and the December 2016 half, Telstra has added around 145,000 Foxtel subscribers via Telstra TV in 18 months. And its Sports Pass streaming numbers are up 20% in the past year. And to top it off, Telstra TV subscribers have almost doubled from 622,000 a year ago (at December 31, 2016) to 1.12 million (at December 31, 2017).
In contrast, Foxtel has not added a subscriber in that time (on a net basis) and will spend the next few months trying to bed down the merger between it and Fox Sports, while trying to keep costs under control and jugging attempts to boost subscriber numbers (watch for a new whinge about the sports anti-siphoning laws so it can grab more live sport and boost its numbers).
And if Foxtel’s subscriber numbers have been stuck on 2.8 million and Telstra TV has added around 146,000 in a year or so, then Foxtel has really lost more than 140,000 subscribers in its own right. Two years ago, before Presto was canned in mid 2016, Foxtel claimed 2.9 million subscribers. Telstra did not give a figure for the total number of Foxtel subscribers in its reports. But even if half the 1.12 million Telstra TV subscribers subscribed to Foxtel as well, then it had more than 650,000 Foxtel/Fox Sports subscribers, which makes Telstra the most important client of the pay TV business (the proportion is understood to be much higher — perhaps 80% of the 1.12 million).
There is one negative from these reports: Telstra’s revenue from Telstra TV hardly grew in the past six months, despite the rise in Foxtel subscribers. Telstra TV offers a suite of streaming-video services, including Netflix and Stan. In some respect, Telstra is competing with itself by offering these SVOD services, but it has to. Foxtel has a long, long way to go.
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