The ACCC has approved Foxtel’s long-awaited takeover of Austar, although it’s not without quite a few considerations.
The ACCC’s statement on its approval of the deal is quite lengthy — you can read it here if you’re so inclined — but the brief version of the rules that Foxtel has to undertake is as follows:
The undertakings will prevent FOXTEL from acquiring exclusive internet protocol television (IPTV) rights for a range of attractive television program and movie content, including:
Linear channels supplied by independent content suppliers, including more than 60 linear channels that are currently broadcast by FOXTEL and many more that are broadcast internationally
Subscription Video on Demand (SVOD) rights to current or past seasons of television programs that form part of a linear channel supplied by an independent content supplier
Movie linear channels (or movies for inclusion in a linear channel) from more than 50% of the eight major movie studios or more than 50% of the eight specified independent movie studios
SVOD rights to movies, except for an 18 month window in relation to the movie studios from which FOXTEL is not prohibited from acquiring exclusive linear rights.
The undertaking further prohibits FOXTEL from exclusively acquiring any movie delivered on a Transactional Video on Demand (TVOD) basis.
The ACCC’s release quotes Rod Sims, ACCC chairman as stating that
“The proposed acquisition would bring together the two main subscription TV industry players in Australia each with a substantial customer base and significant access to key content. This would in turn give Telstra, FOXTEL’s largest shareholder, greater market power in regional fixed broadband and telephony markets. By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets. Taking into account the undertaking which has been offered by FOXTEL, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition.”
Telstra (a 50 per cent shareholder in Foxtel) has its own spin on the deal, phrasing it as a win for consumers, according to Telstra’s Group Managing Director Telstra for Digital Media, Rick Ellis:
“The merger between FOXTEL and AUSTAR will create a pay TV company that will be able to provide innovative content for customers across Australia. It will also enable Telstra to expand its FOXTEL on T-Box offering into some AUSTAR areas over time, enabling regional Australians in those areas to enjoy the same high quality IPTV services as those who live in metropolitan areas. Telstra will provide further detail on its plans to expand the availability of FOXTEL on T-Box at a later date.”