Foxtel CEO Says Netflix Is Like 'The Digital Video Store'

Shots fired: Foxtel's CEO Richard Freudenstein has said in a speech today that multi-billion dollar streaming giant Netflix and its associated competitors are no better than the crappy Blockbuster video store down at the local shops, while also outlining just how much it would cost for consumers to access to content that the pay TV provider maintains a monopoly over.

In a speech to the Australia Israel Chamber of Commerce, Foxtel's Freudenstein outlined how the company plans to compete in a market crowded with streaming video on demand (SVOD) services. The CEO boasted about Foxtel's access to exclusive content, and challenged the assertion that just because Netflix was in Australia that the incumbent pay TV provider had to lay down and die.

Freudenstein defended the higher cost of Foxtel per month, arguing that it was necessary to secure better content deals with partners like HBO. He added that Netflix isn't the killer of Foxtel, instead its a supplementary service. That's when the Blockbuster burn came in (emphasis added):

Foxtel is a premium service, which naturally costs a bit more, whereas Netflix and Presto are add-ons either to free to air for people who don’t watch much TV or to subscription TV. Don’t forget that most Netflix users in the US still have a cable service.
While Netflix produces a growing number of its own good quality shows, which it can afford based on its scale in the US, it will never be able to acquire the range of first run content that Foxtel can. It’s a simple matter of economics. At $15 per month, there is a limited amount of programming that any SVOD service can buy.
Think about it, even if the speculation is correct about SVOD numbers in Australia and even if all those customers were paying, the total revenue for all SVOD services would be only around $150 million per year. That doesn’t provide much for programming investment compared to Foxtel’s (or free to air) programming budgets.
In my view the best analogy for SVOD services is they are the digital video store. People who used to supplement free to air viewing by renting the occasional DVD are now doing so by using an SVOD service.
This is borne out by the fact that in the US and UK SVOD and pay-per-view revenues have grown in direct proportion to the decline in DVD revenues, while subscription players have continued to grow.

Burn.

Freudenstein added that Foxtel's range of content means it will have things Netflix and other SVOD providers can't match, including sport and first-run content from HBO like Game Of Thrones, Silicon Valley and True Detective.

In fact, the Foxtel CEO went on to do some maths about how much it would cost to buy the content Foxtel has an exclusive over:

One of our challenges is to communicate the value that Foxtel, as a premium television service, delivers. This is yet another area of myth making, some of it pushed mischievously by organisations such as Choice. They argue that the way we bundle and price our service disadvantages consumers.
In fact one of the great benefits of Foxtel is that it aggregates in one cost effective offering a whole lot of content that a viewer would have to pay more for if bought any other way.
For an average customer who takes only the drama tier, it would cost $660 per year to get all of Foxtel’s dramas in HD, plus on demand viewing via Anytime.
We only had to add up the cost on iTunes of purchasing eight full series of programs like Game of Thrones, True Blood, Call the Midwife and Dexter to exceed that cost.
The subscription model remains the most cost effective way for most TV viewers to buy their programmes, which is why services like Netflix and Spotify also offer bundled subscriptions.

Freudenstein's logic is that a customer paying $45 per month gets access to over $600 worth of content if it were to be purchased on iTunes, for example.

In Freudenstein's ideal future, the nation will have both a Foxtel subscription and a supplementary Netflix subscription, and that's the way it will stay.

Image via Shutterstock


Comments

    I can see his point with Netflix. I mean, Netflix is not a service full of the latest shows and movies. Unless they are Netflix originals or they have deal to stream new weekly episodes. So if you do want new shows you either get Foxtel, torrent or wait for the FTA channels to air them. If Foxtel was cheaper, had Netflix, Presto and Stan apps then I would consider getting Foxtel.

      What does it matter if its not the newest... I find it easy enough to just tailor my viewing to what's on Netflix... You essentially have to do the same thing with Foxtel anyway for, as a premium service, it lacks a LOT of content!

        Not only does it lack the content in terms of titles, it lacks the content in terms of seasons for the titles it does have. When I subscribed recently to their Play service, I found a bunch of titles I was happy to watch. Unfortunately I didn't want to start watching them from season 3 episodes 4-7. Seriously, that's the sort of crap they pull. Most of the on-demand titles offered were just a small handful of random episodes from a late season of the show.

          Yep - I really dont miss Foxtel and neither has my misses! There's a couple of shows on Lifestyle and stuff that she doesnt have access to but they were easily replaced by crap on E! Through Fetch TV... Not to mention all my FTA channels are going through that without the need for cable ie, I can still record something even if Telstra's cable goes out for a whole weekend (like it did last year 7-8 times) or if my ADSL cuts out FTA and HDD recording still function fine. And then add Netflix and catch up TV apps all on the Fetch box.... THAT's a VALUE PROPOSITION! All for $30 once i pay for the additional channels - oh and add on Netflix... $45. $45 for all my viewing needs and anything else I can still google, find dodgy streams of, torrent, or perhaps even go to the provider's website as some geoblocking is just ridiculously easy to get around - Looking at you Jon Stewart and the Comedy Channel!!!

        Are you kidding? It matters a lot! In fact that's the whole point! If you're happy to watch Friends and Everybody Loves Raymond re runs that's fine. But for cutting edge and new shows, you can't rely on Netflix. Also, no sport or premiere movies. Netflix is not a Foxtel replacement. He makes some valid points. To some people that's enough, but for those people who think its a Foxtel replacement, they are idiots.

          I never said it was a Foxtel replacement.

          Do something with your life if the newest TV shows matter to you that much!! Shit the amount of content we have thrown at us its not hard to find something new - it may just not be what all of your friends are watching so then you cant be in the cool group too ;)

          Do you seriously sit around watching the latest shows from the US all week? Why?! You are missing out on some gold Australian programming!!! And if you aren't trawling the web for new US shows, whats so hard about watching something that came out 6 months ago?!

            Exactly as Foxtel CEO is saying. People like you who don't watch much TV who just watch occasional reruns, would be catered for by Netflix.

              advertisements when I pay for a 'premium service'.....do you own Foxtel?

          It will be a Foxtel replacement when it drives Foxtel out of business by undercutting the subscription costs. Freudenstein is being very disingenuous in assuming just because HBO says that True Detective is worth $X, it's actually worth $X in the abstract. In reality, it's worth only what the market will bear. HBO and other content producers can call the shots because there are a lot of distributors around the world squabbling desperately for their in-demand content. But as they fall one by one before the Netflix bulldozer, Hollywood's clout will diminish.

          The end game is probably three global streaming services, and many smaller specialized ones here and there. The three majors will have massive subscriber bases and the clout to negotiate good licensing fees to keep subscription costs down (or lose subscribers to the other two).

          Ironically, HBO may be one of the three winners (with Netflix and Amazon the front runners for the other two slots) because unlike other entertainment businesses, they've woken up to the danger at an early enough date that they may be able to save themselves. But Foxtel will join the majority that follow Blockbuster into bankruptcy court.

            People pay for good content, as with everything else. Some people want to watch True Detective. Actors, directors, casts, costume designers, camera crews, etc are people who need to earn a living. If you don't want to pay for good shows, p!$$ off. Others appreciate and pay for talent.

              I was happy to pay for Game of Thrones on itunes before Foxtel blocked it. Hell will freeze over before I give Foxtel a cent. Also lol at the Telstra ads everywhere, no wonder this article was soft.

                Here here!

          "cutting edge". Bollocks.

          Here's the thing, you do not need to watch the "first run" content. If more people leave foxtel the cost of "first run" licensing goes down because it loses its value and its made more widely available. But while you support being reamed from behind, expect it to continue. Myself and allot of others have changed for the simple convenience. You can too.

          Last edited 20/08/15 10:22 am

          Of course it's not a Foxtel replacement - it has no ads and is much better! Just switch to the US version if you are going to have a cry about content.

          An interview with Foxtel:
          "Netflix will never replace foxtel?"
          Why not? "Because we have spent lots of money on holding the rights on lots of content"
          Why could you get the content and not netflix? "Because we spent more money on it than they did, thus jacking up the prices on content"

      That's why I pair my Netflix membership with Hulu. Screw Foxtel. I'll watch when I want when I want in full HD.

    Foxtel have no idea! Yes in the US a lot of users have Netflix on top of their cable service, but their cable service falls somewhere in the range of $40 to $70 a month - $70/mth being all the channels available - quick exchange rate and thats $95AUD per month for the most premium subscription - 230+ channels.... Foxtel pricing is still ridiculous - If you want all the channels - Which there are about 100 - the minimum you would be paying is $120 at the moment. Add an IQ3 box and HD content and that goes up to $155

    If you are paying $155 you dont want to compliment that with an extra $15 a month for a lot of the content you probably already have access to!!!

    Its quite reasonable to be paying $110 for 230+ cable channels AND Netflix... But i cant think about paying $170 for something i barely watch!! Cancelled Foxtel at the beginning of the year and havent looked back!

    Digital video store for $15 a mth for me thank you very much!

      im going to preface what i say by mentioning it comes from listening to podcasts starring people generally more tech savy and up with tech then the "average" consumer but

      i don't even think the whole "netflix supplements a cable sub" is true in america, netflix and its supporters make big deals about cable cutting etc, its a bigger service their with even more content and from what i've heard most people who still have cable in america (namely those with netflix too) only have cable because its jammed into a bundle with other services, usually grandfathered on a price point where dumping it makes no sense or they have cable because of a specialty viewing need like sports and even thats going quick with near every major sports league in the US having its own streaming service.

      The population of the US is 318 million vs us at 23 million.

      Bit of a difference.

      There is also a big difference in the exchange rate, and the size of foxtel's customer base (and subsequently it's negotiating power for content deals).

      In Australia 25% of homes have foxtel but in the US 86% of homes have cable or satelite pay tv (or what equates to pay TV ignoring streaming only services like netflix).

      If 86% of Australian homes had foxtel, they could see their way to lowering the price (for that is what economies of scale are).

      The reality is that you can still pick and choose what you want. The base price here is $25 and if you just wanted premium drama with that, it would be $45, if you just wanted sport with that it would be $50 and so on.

      Plus you are forgetting there already is a cheaper service, called foxtel play delivered over the internet where they don't need to provide you with a box and pay for satelite airtime to the dish on your roof as part of the package.

      The maximum price of foxtel play with everything is $100. If you didn't want sport the most you'd pay is $75 including all the premium drama and movies channels as well.

      Last edited 19/08/15 3:42 pm

        Most people only get Foxtel for sport. Sport which is now riddled with advertising.

        But you make good points about the difference in economy. My only issue is this numbnuts from Foxtel is bringing in comparisons with the US market which are indeed very different...

        You are saying I can't use the US market as a comparison but Foxtel execs can?! Right o...

        I'd happily pay the $50 per month for FOXTEL play IF they offered it in HD. They only offer it in SD, which is pathetic considering it's a 'premium' offering. Netflix are already onto 4k. The absolute least FOXTEL Play should offer is HD.

        Why stop at the US? The world population is 7 billion. Netflix's subscriber target is the middle-class-and-above proportion of that number, which is growing every day. Just China and India alone could send Netflix into the stratosphere. You think Hollywood wouldn't drool over the potential for getting their stuff in front of an audience that size, with great ease? HBO will be the exception of course but only because they are now trying to become Netflix (just as Netflix predicted they would hahaha, love it!)

        I reeaaaaally don't think Foxtel Play should be used as a positive example. The service is absolute garbage. I tried it out for the free trial and cancelled before I was done. Shitty range of movies, the on-demand is a joke - what few series they had only offered a scant handful of episodes. The resolution was eye-scorchingly bad on a big TV. To add insult to injury, it's several times more expensive than the vastly superior Netflix offering. Currency of non-exclusives is the only edge Play has, and it's not worth watching at that resolution.

        Population is meaningless. As every global corporation has stated and ill repeat. "We charge the most the local population can pay". So if the distributors want to make money from australians they charge what we are willing to pay. Otherwise they get nothing.

        Last edited 20/08/15 11:15 am

      It's called scale. How many more subscriptions are sold via cable services in the US? Simple economics of scale mate. Not that hard to work out.

        haha - show me the working of it then if it is SIMPLY economics of scale.

        Sky TV in NZ offers all of their channels with HD for $113... How does that work for economics of scale MATE?

        Foxtel have been a rip off for years because they can get away with it. They're now being held to account of this.

        Economies of scale refer to the reduction in cost of producing more of something, but in this case the goods (the shows/movies) have already been produced and the cost of selling one more subscription is going to be negligible. You could argue Foxtel has higher costs because the show producers only offer at a premium but it's more likely it's just because it's a monopoly and doesn't face the competition the US has.

        It's called monopoly. Own the market, charge what it can bear.

    So if I pull the wool over my eyes and scream LALALALALALALA at the top of my voice, the facts relating to number of subscriptions of Foxtel Vs Netflix will all go away. Ahhh, that's better...

    As for that rubbish calculation of $150m for potential programming investment, that's just from Australia! Now factor in the revenue from the rest of the world and oh! What's that? It comes in a a crap-tonne more than $150m? You see, Freudenstein, Netflix don't need to develop programming specific to Australia. They just need to make great programming that works across markets. As CEO of a large company, I'd have thought you'd be able to work that much out on your own. But then that might go some way to explaining why your product and offerings are complete rubbish. I tried Foxtel for the latest season of GoT and I have just 1 thing to say: Never again.

      Just such a dumb company - They are trying to keep everyone in the dark ages while they double dip on subscription rates AS WELL AS a HUGE amount of advertising revenue which they never used to rely on. That ruined any value proposition Foxtel used to have!

        How are those 9 live AFL games on Netflix going? Or live F1, V8 supercars. Or how about that show, you know that popular one, oh that's right Game of Thrones? Wow Netflix is a total replacement alright.

          hahaha - WHERE ON EARTH DID I SAY NETFLIX IS A REPLACEMENT?

          AFL?! Worst sport in the world MATE. And its funny how you specify they get 9 Live games... What about:

          Spend $160 on NFL Gamepass for the year, $90 on EPL On Demand, $10 a month on UFC Fight Pass and thats everything i used to watch on Foxtel for for around $370. FAR cheaper than if i were to subscribe just for the shitty drama shows on Foxtel and guess what?! No ads - on demand viewing, HD streaming, and I have cash money left over for Netflix as well as some movies here and there.

          Do you just watch things that are "popular"?? This would be why you are buying into Foxtel's "Value proposition" lol

          I havent seen past the second season of Game of Thrones and I watched those two seasons when no one even knew what GOT was over here.

          Your argument is based on the assumption that everyone wants what you're watching. And that couldnt be farther from the truth BUDDY.

            You are a minority in Australia. Most people here love the sport of AFL.

              I know that - lumianator presumed that would be the value proposition for me as he sees that as value...

              This is common in the theme from Foxtel subscribers. They think people are dumb and inferior if they dont want to waste money like they are but unfortunately it's quite the opposite. I have had Foxtel for years and years and i slowly watch less and less of it. It would be stupid to keep it especially when i can watch content I want to watch without it!

                AFL is on the free TV that Netflix runs through. Dummies.

                  ???? Netflix don't show any live or on demand sport and never will.

                  AFL shows 4 games a week now, 3 games from 2017. Those of us who are into AFL want to see all 9 games. Further to that, the picture quality on FTA is worse than the internet stream and that's really saying something.

                  If you want to watch all 9 games in HD, there is only one choice.

                  Last edited 20/08/15 9:49 am

              Most people? As in most people in Victoria? The rest of the country couldn't give a hoot.

                I live in Adelaide - its rife here... Bring back the Adelaide Rams anyday!!!

              No we don't.

            AFL is great. But I ain't paying to watch it. Got a free live pass this year and I should be able to aquire one next year.

              Through your telstra mobile contract, which you are already paying above the odds for. When you come to recontract next year, which is how you get another live pass, telstra will want more money than the live pass is worth to buy outright ($90)

              Most people who are really into the AFL will spend $2000 a year or more on the game, and that's our choice (about $600 for a club membership, $720 a year for foxtel, $90 for AFL live pass, then add on the cost of food & drink at the games, a pool of money to punt with, and usually a merchandise purchase or two)

                No. I didn't get it through telstra. Also that's a heavy over estimate there. Two grand a year? A lot of people that watch a lot of AFL wouldn't have the money for that expenditure anyway.

                I watch the games on free to air, and I have a live pass that I got for free (no, not from telstra) and if I go to the game I bring my own food, - I'm not paying $20 for a beer and a burger. Also I don't bet.

                If you're interested I got a free live pass for participating in AFL Fantasy. Whether or not you had any interest in that kind of competition, anyone who wanted a free live pass could have got one with about 5 minutes of effort at the start of the season.

          Sports is a different game. Scripted entertainment can work across the entire globe and benefit from efficiencies of scale, but sports are highly localized. Netflix's whole strategy is to sell Orange is the New Black and House of Cards to the planet, amortizing the fuck out of its content and therefore holding down subscription fees. But nobody can play this game with sports, so I have no idea how that works out. Maybe sports fans are stuck paying high prices forever. Since I don't care about sports, this doesn't bother me.

            Or maybe sports costss can come out of the stratosphere and become interesting and for the masses again. If demand drops, then eventually the cost of access to sports will drop too, and then they will be on an affordable, netflix style service.

    it will never be able to acquire the range of first run content that Foxtel can.

    I'd love for somebody at Netflix to go "fuck you guys!" and just outbid Foxtel on stuff out of spite. That attitude may be why I don't run Netflix Australian though.

      Im pretty sure that attitude is how they got so big in the first place in the states. They kept reinvesting rather than trying to go on about their "value proposition" - Foxtel's value proposition has not changed in years but their quality of programming and service has gone down the drain!

      So you're a guy who pirates the content illegitimately from another market, and companies are meant to make business decisions off the measly $15 bucks you spend per month. Yeah right buddy.

      Last edited 19/08/15 3:59 pm

        What?! Where did he say anything eluding to that conclusion mate?! Assumptions make an ass out of everyone buddy!
        Keep to yourself there guy.

          The last line! He said "That attitude may be why I don't run Netflix Australian though." Learn how to read there guy.

            He said thats why he doesnt run it. as in the company...

            Not that hes not running the service! Gee learn how to interpret prose buddy

              Bahaha no he didn't! My god, anything to save the dumb comment you wrote.

        companies are meant to make business decisions off the measly $15 bucks you spend per month

        You didn't actually read my comment did you?

        That attitude may be why I don't run Netflix Australian though.

        I very heavily implied that they shouldn't listen to me. That is the opposite of what you are accusing me of.

          numbnuts came in here spouting off about Netflix not being a Foxtel replacement but ahhhh... no one actually said that.

          I'm, guessing he's trying to justify the $150 he spends a month on watching a few games of AFL and 4 episodes of Game of Thrones

      They wouldn't even have to win the bid, just get into the negotiating room and drive up the price for Foxtel.

    Popcorn Time FTW

      Make sure you have a decent VPN that keeps no logs, pay with gift cards bought through a 3rd or 4th party (or prepaid debit cards or bitcoin or any manner of other methods), use a fake name on said VPN service (good ones don't care about your name, and only want an e-mail address to a username/password to and payment)

      Last edited 19/08/15 3:31 pm

        What a way to live, to enjoy content! For the 99% of non nerds in Australia, this isn't a viable nor legal option to view content.

          100% agree. For most people who don't work in IT, stealing the stuff over the internet has become way too hard.

          I admire what Optus have done with Fetch TV - by bundling the $15 a month subscription service into their unlimited broadband offer, they have basically put a fetch tv box in the home of nearly every optus internet subscriber and all of those people get 38 channels plus 30 free movies to watch (which are constantly rotating - every day 1 goes off and another comes on) and on top of that the box provides the best free-to-air PVR there is (it constantly scans the channels every 6 minutes and if a show is running late, it keeps recording it for you - doesn't work so well with the ABC on 7/9/10/11/7mate/One/Go/GEM etc it works extremely well) and on top of all that you can rent the latest movies through the box as well

          Last edited 19/08/15 4:15 pm

            1. Install adblocker add on for browser.
            2. Go to Primewire.ag
            3. Make free account
            Stream using Vidbull.com , vodlocker.Com ,bestream or thevideo.me links.

            This. Fetch has been brilliant since I got it - I only really got it as it was included in the bundle but since I now pay the extra $15 for the premium channels on there - Which, for $15 there's a fair few kids channels, womens channels (sounds sexist but im talking E! FTV etc) there's sport and docos.

            If you dont sit all day on the couch trying to find something to watch, that coupled with Netflix is MORE than enough content for the average family!!!

              I have fetch as my replacement free to air recording box, and I also pay the $15 per month. I have foxtel as well for the AFL, but for $15 it was a very cheap way for me to get all the BBC channels (and I rate their content) rather than subscribe to 3 different packages on foxtel.

                Great idea!!!

                I love Fetch - its convenient in a lot of ways and a lot easier for my partner to navigate around even though it still is a clunky interface!

                I'd love to still have Foxtel but i cant justify watching a couple of UFC events (which cost PPV as well anyway) and a couple of english football and NFL matches... I used to watch movies of an evening with the misses but kids happen... lol

            VPN and pop corn time. That's easy for anyone to set up.

      Ditto. Get everything in one place. Hell, I'd even pay to use it it's that good.

      Popcorn Time has no viable legal business model, because it does not contribute to creating content to begin with. Netflix does, and manages to hold subscription prices down to a point where you gotta be a ridiculous cheapskate to reject those prices.

    Does anyone else think 'Freudenstein' is kind of an ironic name for someone so seemly...not smart...

      Totally agree. His name is a cross between Sigmund Freud and Dr Frankenstein. I assume that means he has both a god complex and mummy issues.

      Not so smart, I bet he would make more money in a year than in your lifetime. You don't become CEO of a company for nothing. What are your qualifications exactly?

        +1 title of day job Kaflooey or STFU

        (not that I would be in a hurry to believe kaflooey if he/she told us they are a CEO as well)

        Last edited 19/08/15 4:17 pm

          let's just say that I don't know what the Foxtel CEO's salary is, but I still wouldn't take @lumianator's bet.

        I knew I'd cop this...yes I know the guy's got to be doing something right to be a CEO but I went with it anyway because a) I thought his name is funny; b) there's different kinds of 'smarts' and c) while I am certainly not a CEO (I'm an engineer if anyone cares...) I've have come across both highly paid and not-so-highly paid individuals who would lead me to believe that salary is not proportional to intelligence. I'll leave it at that...

    Yeah, yeah. Whatever helps you sleep at night, you overpriced, self-agrandising jack wads. Netflix is better value any day of the week.

      Hell yeah. Can't wait to fire up Netflix and watch all of my AFL, NRL, F1, V8 and premium shows on Netflix this weekend!

        Ahh straight from the How To Talk About Foxtel playbook.

        Somebody has said that [other service] is better, what do I do?
        Scream "LIVE SPORT!" loudly until they go away.

        Seriously though live sport doesn't automatically make things better value. Not everybody likes sport.

        Value is subjective.

          It's the only proposition people have left - And it usually comes from the mouth of those trying to substantiate paying $150 a month to watch tv...

            If you only wanted the live sport on foxtel the cost is actually $50.

              Yeah but that was brought down only recently wasnt it?

              The structure used to be that you had to buy the entertainment pack and add sport on

                The cost to watch sport on foxtel used to be $76

                Still not $150.

            they call that post-purchase rationalisation i think...

        I gave you an upvote for that comment it really made my day (and that upvote nulled out the down vote someone gave you)

          Downvote was me - Arguing that Netflix is inferior as a product to EVERYONE's needs is a trump card that's been played over and over for years!

        So many Foxtel shills on here, it's pretty funny.

        I work in Home Integration and I can tell you for a fact that the majority of our clients are moving toward SVOD for most of their entertainment needs except sports.

        Regardless of the sport coverage and exclusive content licenses they have, Foxtel have been using their monopoly power to price gouge since forever, and for a lot of people it's simply not worth their money. One can spend over 100 bucks to get the top tier Foxtel package or spent 12 bucks a month for a huge range of content that customers can watch whenever it suits them without labouring over a recording regime, (Play is a joke btw), which of course features mostly ALL seasons of each series available, not just the most recent. It's an easy decision for a lot of people.

        As someone else on here has stated, it's not just about the 'economy of scale'. If that were the case, it would be far cheaper in the US, and an absolute fortune in countries with a population smaller than ours. Distributors can only charge what the population are willing to pay, but a lot of us wouldn't know any better. Of course, now a lot of us DO know better, thanks to Netflix, and if you think that that didn't scare the crap out of Foxtel into hurriedly restructuring their pricing, locking up their licensing deals and rushing out the piece of shit that is IQ3, then you're kidding yourself. Guiding customer to DOWNLOADING content to their IQ rather than streaming!? Please.

        I would wager that Foxtel (via its parents, Telstra and News Corp) had a lot to do with making sure the website blocking legislation was passed, and surprise surprise, they seem to be the first to leverage it. Didn't see that coming...

        Let's take it further - News Corp thanked Telstra for their work on the NBN. Telstra get the ROI (not really 'investment' when Howard fucking handed it to them) on their cable network. They now get to build MORE HFC, when the idea of the Lib's cost cutting was to utilise EXISTING copper, not lay more. FTTN provides enough megabits for only ONE HD SVOD stream per household, making Foxtel more lucrative for families.

        The Liberal NBN, hey. 'Hitting targets'? Whos cares. Analogy: You wanted us to sprint. We refuse. Our target is to now power-walk 50m, which we've done. TARGET: HIT. Bravo, c*nts.

        'We're delivering results quicker'? Analogy: You're very hungry. You've ordered the big brekkie. Here's a party pie. What? You were hungry. DESIRED RESULT: DELIVERED. Thnx Malcom!

        Straya.

    Netflix is and will always be the poor man's foxtel.

    Foxtel just paid the AFL $1.7 BILLION ($1700 million) for the rights to all AFL games for the 6 years from 2017-2022.

    In 2062 when I am 84 years old, I'm sure foxtel will still be paying a tonne of money to the AFL to maintain those rights. Nobody can touch them, they will just keep paying.

    If you want live sport you need foxtel. If you want the latest movies you also need foxtel (only C grade titles and below go straight to netflix). If you want the latest premium series which News Corp own the rights to, you also need foxtel.

    If you want a library of movies from a few years ago with a few exclusive titles and all of last year's TV shows, then you have netflix - and by the way, yes I am a netflix subscriber. (as well as having foxtel)

    Those who can't afford either will just use popcorn time, torrents, file locker sites, newsgroups/usenet or the dark web to get their stuff, and often even those who can afford it do. They still need to pay though - for their VPN and their unlimited internet plans.

    I think foxtel gets a lot of unfair treatment in the comments box here, and I suspect most of the people commenting either haven't used it at all or not in a long time. For example one comment that comes up every time a story like this is run is "i have seen everything on foxtel". it is literally impossible to claim you have "seen everything on foxtel".

    If you are paying for foxtel (and not a "dealer") then you will have a full time job and therefore even if you spent all your weekends and every night watching foxtel non stop (and how sad would that be) it would still be impossible to have watched everything.

    To quote from the article:
    the best analogy for SVOD services is they are the digital video store. People who used to supplement free to air viewing by renting the occasional DVD are now doing so by using an SVOD service.
    That is 100% right. So is the next exert that gizmodo quoted.

    The only place in the world where subscription satellite/cable TV is dying is in gizmodo-comment-box-land. Everywhere down here on earth is seeing an increase.

    Last edited 19/08/15 3:27 pm

      I reckon in 2062 we will stream AFL directly from the AFL (with an associated cost) and Foxtel won't exist in it's current form. It is running an outdated model that is not sustainable.

      Then after watching the game we can jump on our hoverboards. "Your jacket is now dry!"

      If you want live sport you need foxtel. - Incorrect

      http://watchafl.afl.com.au/ - $25 a month...

      NFL Gamepass is $160 a year
      EPL on Demand $80 a year
      UFC Fight pass $10 a month
      NBA League pass $10 a month ($30 for nutcase fans who want premium)

      Want me to go on?

      If you want the latest movies you also need foxtel

      Or how about save the money on subscription costs and use an on demand service for films - only when and if you want them. Or do you sit around watching everything on Showtime - Let's not forget the amount of aged CRAP on there as well!!!

      Seriously - Foxtel is not great value but they have definitely SOLD their value to you. You dont need Focxtel. It's the lazy man's, expensive all in one solution which unfortunately still doesnt have all...

      Sorry- https://id.afl.com.au/livepass

      I posted the international one... This one's even cheaper... Definitely cheaper than what you pay for Fox Sports!

        Yes but it's cheap for a reason. It's only available on tablets & mobile phones because the quality is restricted to 600kbps (around 360p quality in youtube terms)

        Even the international one, which claims to be HD, is barely better picture quality than free to air once you blow it up on a 60+ inch TV

      To address your last point - It is dying in reality.

      With more options to access only the content you want - many consumers are moving away from paying this premium to have a bunch of channels you dont want and into a world where we can access and pay fo the content we want only what we want and when we want and that fills up our desires!!!

      You have a very close minded view which is exactly what Foxtel Marketing want to keep reminding you is the reality.

        The facts don't support that point of view. Subscription numbers are increasing not dropping,

        This year foxtel has seen its biggest rise in subscriptions since 2001 and it's lowest churn rates too.

    I don't mean to offend anybody, just raise a point here:

    This whole viewpoint that most everyone inclined to post on blog sites has, is due to the internet, or those active on sites like this at least, are part of a very specific microcosm. Everyone hinges upon the idea them and everyone else like to watch (mainly US) TV shows on TV, and the odd movie.

    I subscribe to Foxtel 100% for sport, which, if it isn't on FTA, there is no real alternative to get access to. And it's something that even pirating or paying for a copy can't effectively get you. Working in IT also, people always say why would you ever get Foxtel etc etc. I admit I think the price is steep, and it's now Foxtel's most expensive package, so they know it's their bread and butter I'm guessing, but I don't have another option other than to go without.

    Now I don't have a Netflix or any other streaming subscription, as I just can't get into TV, and rarely watch movies, so I can't really identify if there are is anything else provided by more traditional cable providers that streaming services don't.

    Hope that made at least some sense, I'm tired :P

      For a lot of people who have the sports package though, the reality is you can fund the cost of foxtel quite easily by gambling on the games. I find I can.

      Having said that:
      Gamble responsibly and if you can't afford to lose it, then don't put it on.

      I do have foxtel with sports (obviously) and I agree the price is steep at $60 for HD, but for what you get it really is quite big value, especially in the context of figures like $1.7 billion that foxtel agreed to pay the AFL through to 2022. Multiply the millions per year by the number of sports they carry.

      I do have netflix and stan, but I'm considering cancelling both of them. I just don't have enough hours in the day to get through everything I record on foxtel, so i barely use either netflix or stan.

      Last edited 19/08/15 3:50 pm

        the reality is you can fund the cost of foxtel quite easily by gambling on the games. I find I can.
        I find this disturbing :)

      Makes perfect sense mate. A lot of the problem with people's stupid logic in these comments, is that they think Foxtel and Netflix is comparing Apples with Apples. They are not the same service and never will be, they are complimentary.

        Huh?! You are the one suggesting it is comparing apples to apples. Anyone who says Netflix does all they need you start a rant about SPORT - Yeah but what about SPORT? SPORT SPORT SPORT?

        They are different products and one's value proposition relies heavily on their sports rights. The other relies on streaming and binge watching shit.

    talk about being so close yet so far, i can see his point in saying that netflix is like modern day video stores, your accessing content that outside of originals isnt minutes after release, the problem with his statements is that netflix isnt supplementing foxtel, its supplementing piracy because foxtel is not the "premium service" we want.

    Foxtel could be onto something but their current implementation, approach and general attitude is just out dated and wrong, they could be be a "premium service", they could be the place you pay a little extra to get the latest content day one because thats what foxtel invest in but atm it just a double dipping, jesus christ stop the ads, scheduled television operation with a broken half assed VOD service attached..if you pay more.

    drop the ads, fix the VOD offerings and costing and offer it without the rest of the foxtel B, then charge more the netflix because you have GoT and then we can talk

      If they catered to all of those demands, foxtel would be broke.

    I had foxtel for about 9 months, it was good. Then I got Optus Cable with Fetch TV so decided to cancel it...then after a while I stopped watching Fetch TV. And now I rely solely on netflix and catchup on the commercial stations websites. The only thing I miss, maybe is the cooking and lifestyle shows.

      Same here really - had Foxtel longer though and i just dont miss it with all the content available now. Even catch up tv getting better i can choose when i want to watch whatever has been on the past week, which involves finding some rare documentaries i didnt even know were on TV!

    Does Foxtel still have ads like FTA? That's the main thing that puts me off.

    If I'm paying a fee for my TV/movies, I want it to be advertisement free.

      No satellite/cable TV service anywhere in the world provides an ad-free service on it's live channels. Foxtel is no different.

      Having said that, you can record any program you like and skip the ads (the set top box is included in the price), or use foxtel's ondemand feature on the set top box to watch your shows ad-free.

      There is also Foxtel Go on smartphones, PCs, tablets and using the catch up service on Foxtel Go you can also watch ad free (some shows have 1 ad before the start of your show, but that's it)

      Last edited 19/08/15 3:57 pm

        Good point. The problem is, people forget that for the first year of the subscription, it is mostly subsidising the high cost of the installation and hardware of the new Foxtel customer. The cost of the subscription is not enough to have a service with no Ads. In saying that though, I think the amount of ads sometimes on Fox 8 and comedy channel border on ridiculous.

        thats because they all rape their customers and profit gouge. The general rule in life is if you pay for something you expect to get a premium service over the non paid version. and a premium service means NO ADS.

          I agree - double dipping on subscription rates and advertising revenue seems to really go beyond what would be expected of a premium service

      Yep more full of them than ever! Last year it felt like it was ramping up every month or so there wold be longer and longer ad breaks!

    In fact, the Foxtel CEO went on to do some maths about how much it would cost to buy the content Foxtel has an exclusive over:

    His maths is bad. $660/8 is $82.50 a season. I don't have itunes, but on Google play, GoT series 5 in HD is $33, at which point you own it to play when you want, without need for a HDD.

    Let's look at these statements with a modicum of rationality before commenters divide themselves up between the foxtel v netflix factions. Couple of underlying facts we need to keep in mind before interpreting what's been stated. Your average adult has a finite level financial resources and a finite level of free time. Foxtel I've found (at least within my social circles) appeals a lot more to people who are invested in sports and for them the price-tag associated is worth it; netflix I find has been more appealing to people who are bulk entertainment consumers (e.g. binge watching a favourite tv series). Between the 2 entertainment factions however is an overlap as people have singular interests when it comes to keeping up with the most recent tv shows (i.e. some of my friends like GoT and others like True Detective). I found that most of them preferred purchasing the tv series by itself than getting a subscription to access it.

    So while Foxtel does have access to the most recent content out there; its more equitable to pick and choose what you like to follow and watch (assuming you aren't trying to watch every new series out there). Foxtel has exclusive content at a premium price however it can only grow so much; it's price point will act as a deterrent for growth into low income markets or counties with poorer exchange rates. Netflix has a vault of older content and some new content (that they create) at a much cheaper rate and has a much larger probability of possible growth. Neither are at immediate risk of the other and it literally does come down to each their own in preference of what you like to use.

    However. From an investment perspective NFLX has the greater potential for growth and access to a much larger market base. They have also exhibited uncanny ability in adapting to the existing broadband infrastructure across their user-bases. While they definitely lack the capital in short-medium term to pull content away from Foxtel I wouldn't be surprised if in 5 years they expand into that segment of the market. Let's also remember that Foxtel is in the process of change in leadership with Murdoch's sons to still truly prove themselves.

    Edit: It is worth mentioning that Foxtel is a lot more diversified in their holdings than Netflix and have a much more significant war chest to fight off any encroachment to their market share; that said if they continue to underestimate the impact Netflix can have on their bottom line it will be too little too late.

    Last edited 19/08/15 4:42 pm

    Yeah so get a VPN- not illegal.
    Sign up to Netflix US- not illegal (not really) - I mean if we can purchase stuff from Amazon and eBay overseas why can't we purchase media- because wanker media corps know there missing out on $$$ so they try to regulate it and get government to pass laws saying it's illegal... Blahhhhhh
    Hello to US content and a bucket load of content that Foxtel could only ever dream of having. Netflix is cheap, convenient, works on any platform easily and is well above its value in terms for what you pay for it!!! Anyone paying for Foxtel even if it's 45 a month I really feel sorry for you... A little time, money and research would see you save a lot off money even if you wanted to watch current seasons of TV shows and movies in HD... Google is your friend!

      Or sign up to Netflix AU to avoid shitty currency conversion rates, and log in from the US (either through changing your DNS or using a VPN). Netflix offers worldwide viewing for global travellers. It welcomes you as a traveller if you log in from a different nation's IP address.

    It would be interesting to see how much money Foxtel has lost since netflix came in to the picture. I bet they are hurting bad. Like really really bad. Hence all the new promos and no lock in contact deals they have going on at the moment. I nearly signed up for the sake of it but I bailed out because I realised how crap foxtel was. The only time I'd sign up to foxtel is if they offer just a sports package. Then both players can exist side by side in this world full of discourse.

      Their subscription numbers have increased since netflix came. They have added almost 300,000 households.

    I struggle to keep up with bills, house payments, kids school etc.
    I imagine a large number of Australians are in the same boat. When we are working out our budgets, we put luxuries at the bottom of the list, or off it altogether.
    Thank you Foxtel for making it clear that you are a premium service. I'll let the rich people with their premium money subscribe to you and I'll continue to use Netflix.
    Obviously the correct choice for the Australian battler.

      I actually agree with this comment, and I know many people in your situation.

      Not everyone can afford foxtel, and I appreciate that.

        This was always my main point as well - Before kids we always had it, now its a damn luxury! lol - But not just affordability, actually having the bloody time to sit down in front of the TV!
        I found myself last year catching up on Daily Show Episodes on Comedy Central via Modify Headers, when i was already paying for the rights to be able to view them just didnt want to record and watch etc etc. It just seemed more convenient to watch online and I feel more and more is becoming convenient enough

    I dont watch sport, Netlfix/Hulu provide all the entertainment i need. EAD foxtel

    Only reason I have Foxtel is for Sport and the ability to record it and watch it when it suits me.

    If I could get live HD AFL, NBA and EPL for less than $60 a month I would do that instead of having Foxtel.

    I understand purchasing rights is expensive and Foxtel buys a lot of valuable content rights. Just wish they would let us pay for what we want.

    Why do I have to pay for the entertainment package when all I use Foxtel for is Sport?

    Not a fan of Netflix tbh. I like to watch shows as they're released, not years later. So Usenet is my friend for that :)

    The bit old Fraudo' leaves out is that content in Australia is so expensive because Channel 9 and the Fox have over-bid for things (at least compared to other markets) for years to ensure they have a large degree of control over the Australian market!

    Everyone - you're missing the most important point here, which is that someone finally called out Choice for their shockingly misleading of the consumer with all their stupid graphs and tables. I mean, snarf graphs.

    These guys don't, and will never, understand that by bundling that one channel that you kind of actually want to watch with 15 other channels that you'll never watch, you're actually delivering MORE content which dilutes the cost being paid for that useful content.

    If you were paying $50 per month and getting 25 channels, then you're paying just $2 for each of those channels. Why on earth would you only want to get 3 good channels and have to pay $16.66 per channel? That's just too many dollars!

    Finally, I have to conclude by pointing out that Netflix's subscriber base can only generate so much revenue at $12/month and that this pales in comparison to our content acquisition budget at Foxtel. I mean, it's not like Netflix is beginning to trend globally and could be the largest provider of content on the face of the planet sometime in the next decode. Even then, it's not like they would be able to negotiate more favourable, global, licenses with a near-ubiquitous user base anyway. The entire idea is preposterous!

    a lot of people in america have cable because that's how they get their internet and it's cheaper to get it bundled with basic cable they don't use than just straight internet

    guys a jackass just like the rest of aus and its gay afl deal what will 400 mill to afl..the players are useless they dont even make 1 mill a season and only play 20 games a seaon what rubbish..i hope foxtel dies netflix si ok but little boring on content presto is just crap like collingwood and fat mcguire eatin maccas every night..if your an idiot and you luv pretend football go pay $50 amonth and watch the dumb game 1 league instant replys on foxtel..bunch of morons

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