Foxtel taps data to overhaul content, channels, advertising services

Pay TV company ups the ante on its digital and data play and shakes-up its programming and advertising offerings in a bid to retain relevance in an increasingly competitive on-demand content world

Patrick Delaney at Foxtel on Oxford
Patrick Delaney at Foxtel on Oxford

A stronger data insights story, new advertising products, Samsung smart TV deal, four additional channels, extended content partnerships and a Lifestyle brand overhaul are among the ways the Australian pay TV player is looking to retain advertiser relevance in a hotly contested content streaming world.

At a special industry event at the new Foxtel on Oxford site in Sydney last night, the company outlined changes to its business and content model designed to better keep up with changing consumer entertainment demands. Most stem from wider efforts to better harness digital and data capability.

Foxtel CEO, Patrick Delaney, described it as a revolution of the business over the past 18 months and its biggest programming shake-up in 10 years.

“We are more now than a set-top box, disc drive and recording your favourite TV shows. We have embraced the 21st century,” he told attendees.

While many still view via linear TV channels, Delaney noted 500,000 Foxtel customers are now accessing its services without any set-top devices. Other innovations to up the ante on streaming included getting 500,000 IQ4 boxes out to market, and rolling out ultra-high-definition.

“We live IP and all things digital. We now have many platforms, distribute under many brands including Kayo Sports, one of our brands and in the Foxtel group,” Delaney said, adding the unique Kayo sports streaming service is Foxtel’s “Jetstar”.  

The second phase of work was about improving content searchability. This has led to a fresh user interface, first revealed in June, and off the back of data utilisation and algorithmic improvements. The new UI debuted across Foxtel’s IQ4 streaming boxes and includes a Netflix rail, reflecting the group’s new partnership with the streaming provider.

The UI will be rolled out to 600,000 IQ3 devices in the next month, increasing the total number of customers to 1.2 million.

Foxtel has also announced a deal with Samsung that will see Foxtel tiles embedded into the technology manufacturer’s digital content menus on smart TVs. Two new video tiles will appear, offering opportunities for trailers and content, blowing out to a full-screen image.

Then it’s about content itself. Alongside the Netflix deal, Foxtel has revamped its BBC relationship and struck a fresh partnership with SBS for on-demand content from November. Delaney said further app launches are planned later this year.

“Who would have thought we’d do a deal with Netflix 12 months ago? But sales have been great, churn is down and we have an interwoven experience to offer,” he added.

The latest step is overhauling channels. Four new Fox-branded channels are being rolled out – Fox One, Fox Funny, Fox Hits and Fox Crime – to sit alongside the flagship Fox Showcase, Fox 8, Fox Classics and Fox Sports offerings. Foxtel is also bringing the BBC Earth channel to Australia from October as part of the renewed agreement with the UK broadcaster, replacing its existing BBC Knowledge channel.

“We want to better reflect our own Fox passion and brand in and around the content,” Delaney commented. “Secondly, we want to take control of the content – we want to be able to buy the content, leverage it, make sure we have on-demand and we can deliver fabulous well-honed brands that deliver for our advertisers. And we want it exclusive to this market.”

In addition, under the stewardship of former Pacific Magazines GM of homes and food, Wendy Moore, Fox’s Lifestyle products have undergone a brand revamp, driven by deeper insights into its predominantly female audience. The four key pillars identified – discovery, emotional connection, optimisation and a sense of belonging – all fed into the new positioning, ‘we are family’, Moore told guests last night.

Alongside the fresh branding, Lifestyle is creating new programs driven by behavioural, commercial and viewer data. These include an original series, Find Me a Beach House, hosted by Deborah Hutton, a fresh series of Australia’s Real Housewives of Melbourne, and the return of The Great Australian Bake-Off and Love it or List It Australia.

Advertising shake-up

With the content and digital changes comes a rethink in advertising offerings. The most disruptive change is removing midroll ad content in on-demand services – a step Foxtel said was necessary to better reflect on-demand user behaviour.

The new-look Foxtel Media business is now working to unify ad products across on-demand, digital and live programming to replace what has been a disconnected advertising process, shortening ad load overall. This kicks off with unified ad experiences across Foxtel Go and Now products.

New ad offerings are also coming, including the 15-second ‘Q break’ or quick break, a 6-second linear advertising bespoke ad slot rolling out across 15 broadcast channels. This will run between the conclusion of one program and commencement of the next and incorporate two 6-second ad units. There’s also the 1-minute ‘M break’ spot featuring two 30-second ad units. Each is accompanied by a short intro and represents a reduction in ad loads on linear TV channels.  

Foxtel is also planning targeted on-demand video advertising based on subscriber insights, plus IP ad insertion for digital advertising across its Kayo Sports, Foxtel Go and Foxtel Now products.

Foxtel Media chief, Mark Frain, said the changes are about putting customers at the heart of everything the group is doing.

“The Samsung content discovery bar, along with the new ad units… demonstrate our focus on building new products that don’t just reflect user behaviour, but create new experiences for our customers,” he said. “We are disrupting the traditional advertising model on linear and digital TV.”

Data play

Driving most of the change is a better data play. Foxtel chief data and analytics officer, Jane Eastgate, has spent the past 12 months working her way through data from Foxtel’s 1.6 million connected households to better understand what customers are watching and interested in to inform content bought and produced by the group.

“Over the last 12 months we’ve been using this viewer data internally to understand what customers are watching and when to inform what content we buy and produce,” Eastgate told attendees at the Foxtel industry event.  

“We’ve also been using it to understand customer engagement with our platform, looking at retention and how we manage churn.

“We’ve trialled a lot of communication and content with customer to see what works and try to directly prevent them from churn while introducing them to compelling content relevant to them. It’s been successful and a great opportunity to demonstrate internally the power of this data.”

Commercially, Foxtel is now looking to open up this data to agencies and advertisers. “We’re working with an agency… to develop what this access can look like and what products can look like and come to life. Importantly, it’s about how this leads to stronger engagement,” Eastgate said.

The ambition is to have targeted, hyper-personalised and precise advertising to viewers via the set-top boxes. “That will bring together the power of personalised advertising on the box with all the connected OTT devices as well,” Eastgate said.

“We can take that even further as we understand consumers consume content and on what platforms, giving an advertising experience when you’re watching on the set-top box, that might be different to when you’re out at an event watching a show.”

To be ready for the opportunity, Eastgate advised the industry to broaden its understanding of customer and step away from pure segmentation and sample data.

“What this enables us to do is transcend from thinking about things in segment, but in terms of precise, actual customers,” she said.  “I appreciate there may be nervousness that instead of reaching 200,000 with a campaign, you might get too targeted. Again, this is the change in thinking. It doesn’t mean that at all. What it means is hyper-personalisation en masse – we can communicate and share content with each customer across different devices.”

To do this, Eastgate called on the industry to set up “data ecosystems”.

“We’re bringing our data to the table; we know advertisers and agencies have data too. It’s about creating those connections so ultimately we all serve customers well with all experiences,” she added.  

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