Foxtel integrates with Netflix, SBS

In the wake of increasing competition from streaming services and decreasing subscriptions, Foxtel today announced a number of new initiatives to improve its user experience (UX), including an integration with both Netflix and SBS On Demand.

Foxtel CEO, Patrick Delany, took to the stage at the new Foxtel Centre in Paddington today to make the raft of announcements, touted as the ‘new Foxtel experience’.

The big UX innovation sees Foxtel integrating Netflix into its new experience for its iQ4 users, allowing users to browse Netflix and Foxtel shows side by side. A new remote control features a Netflix-dedicated button, and Netflix shows will feature on a dedicated Netflix rail on the new user interface.

SBS On Demand shows will also feature in the new Foxtel interface.

Delany said Foxtel wants customers to have the best of TV and on-demand in Australia all in one place. The new user interface aims to be simpler to navigate and is backed up by an ambitious software upgrade program, which will be rolled out over the next few months to around one million iQ3 and iQ4 devices.

“With our new user interface, accessing Foxtel’s 16,000 hours of TV and on-demand content is as simple for customers as one-click on the home button of their existing remote control,” he said. “I can’t think of a better streaming partner to kick off the new Foxtel experience than Netflix.

“The new customer interface puts two entertainment powerhouses together, providing Foxtel customers with access to Netflix service alongside our Foxtel Originals and programs from HBO, FX, the BBC and more."

The experience including Netflix will be progressively rolled out to iQ4 customers starting today and is expected to be complete in August. The iQ3 roll out will begin in September with all iQ3 customers expected to have it during November. Software updates will be managed remotely over the coming months and the new experience will work with their existing iQ4 and iQ3 set top box and remote control.

"The new Foxtel experience simplifies the way iQ4 users can enjoy Foxtel’s incredible range of drama, sport and movies as well as the best of video on demand, with the experience coming to iQ3 users coming shortly after," Delaney said.

The latest move by Foxtel is a direct effort to claw back market share from streaming providers, who are leading the current transformation of entertainment on-demand.

According to Foxtel, which is majority-owned by News Corp, total subscribers were up 5 per cent year-on-year to 2.9 million. In contrast, new research from Roy Morgan shows 11.5 million Australians now have a household subscription to Netflix, with 3 million accessing both Netflix and Foxtel.

News Corp also handed Foxtel a $300 million lifeline in April this year, without backing from fellow shareholder Telstra, amid reports Foxtel lost about 100,000 subscribers in the March quarter.

Roy Morgan CEO, Michele Levine, said the tie-up between subscription TV giants Foxtel and Netflix carried opportunities for both services.

“Foxtel and Netflix are undoubtedly the two giants of Australian Subscription TV and the plan for Foxtel to provide Netflix through the Foxtel iQ box carries significant opportunities for both services," she said. “Enabling Australians with household access to Foxtel to view the streaming service through their Foxtel iQ box is a solid defensive measure to help prevent existing Foxtel subscribers ditching the service to move to cheaper alternatives and provides an extra incentive for new users to sign up for Foxtel.

“The proliferation of cheap streaming video services led by Netflix in recent years has provided the biggest challenge yet to Foxtel’s traditional business model and there are more cashed up competitors on the way."

Levine pointed out nearly 3 million Australians already watch the Australian-owned Stan and services including Amazon Prime Video and YouTube Premium are growing quickly.

“The more Foxtel can be regarded as the ‘gateway’ to video content from the likes of Netflix, and perhaps other rival services in future, the more access Foxtel will gain to detailed user data metrics that will help them tailor  services, and advertising, to individual viewing preferences and the more valuable their service will in turn be to advertisers looking for an audience," she continued. 

“For Netflix, the ability to link up with Foxtel’s News and Sport services and be a frictionless option for the 2 million Foxtel viewers who don’t currently access Netflix is an opportunity for growth in a market which may be reaching maturity."

Notably, Netflix’s June quarter 2019 results showed a net loss of subscribers in its home market of the United States for the first time in eight years.

Free six-month subscriptions to Netflix with some 12-month Foxtel packages will be offered. New subscribers and those who have paid for a Foxtel service for eight years or more will receive the new remote, which has voice activation and bluetooth, for free.

Amid the new strategic approach, Foxtel has been experiencing a mass exodus of marketing staff, with long-time GM of advertising sales and brand partnerships heading out the door in March.

Andrew Mulready left the company at the end of March after a decade with Foxtel. His departure comes a week after Foxtel director of marketing for sports, Adam Ballesty, quit after just six months with the group.

It also comes just over four months after group CMO, Adam Lark, exited the company nine months into his new-look role and following another executive restructure. 

Most recently, Foxtel group director of marketing, John Casey, left in June.

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