The examples of Uber shaking up the technology averse taxi industry, Airbnb disrupting the hotel business and Netflix catching a sleeping Blockbuster by surprise have been shared at length. For a while, these were the comparisons drawn to a new startup I’d get pitched on the daily. But there’s another case of that last example that wasn’t just a fad. And it happened on our own soil.
Foxtel needs no introduction in Australia. If you didn’t have a Foxtel set top box in your home growing up, you knew someone who did. It had everything. Well, at least more than free-to-air TV. Slowly, however, more and more ads kept creeping in and the available content (when considering the price) didn’t necessarily stop Foxtel from getting more subscribers, but it definitely left the company not growing on the trajectory it previously had. Netflix’s 2015 entry into the Aussie market didn’t exactly help, nor did the country’s obsession with piracy.
Fast forward to today and Foxtel boasts just shy of 4 million customers. But how did it prevent suffering the same fate as Blockbuster?
If you ask Foxtel Group’s chief technology, operations and product innovation officer, Les Wigan, the company accepted there was a new future of television consumption already unfolding before its eyes. As we wrote previously: Foxtel Now is the shake-up that Foxtel had needed for years.
“I’ve been involved in organisations that have tried to drive innovation that from the outside could be seen as potentially cannibalising your business. ‘Do you really want to do that?’ or, ‘Is that really the right thing to do?’ There’s numerous examples and I do think actually Foxtel was suffering from a little bit of that, probably four or five years ago,” he explained.
“The Netflix’s of this world, these OTT services, were certainly taking dramatic market share. So, really, off the back of that, when we were still working over at Fox Sports, we identified that there was a real opportunity.”
And that opportunity was those of us with money to spend, but not enough to justify an entire Foxtel subscription.
“With the great sports production and quality that we have, [the idea] was to go direct to consumer and produce a brand that was appealing to that generation of consumers,” he said, admitting that generation of consumer was those which had “probably rejected the Foxtel brand to some degree and didn’t want the whole set top box and installation process”.
Aside from calling me out, Wigan said it was important to drive innovation, but make sure the company was offering the consumer what they needed. So, it took this whole ‘we’re good at sports and we’re good at broadcasting’ thing and reinvented the proposition. Giving birth to what we all know as Kayo.
But from Kayo, Binge and eventually its news service Flash, was born.
“It does require quite a lot of discipline to do that,” he said, adding, “definitely uncomfortable, for sure”.
With Kayo, Foxtel found a niche
Although Kayo was (and still is) successful, Foxtel had the luxury that there wasn’t too many other streaming services in Australia that are simply for sport. Optus tried, and now that they’re switching from a free service to a paid subscription – well, the tweets in that linked article speak for themselves. Stan has some sports via Stan Sport (including the UEFA and Super Rugby), Telstra also has a service, but Kayo doesn’t require you to have an expensive phone plan tied to it. With Kayo, Foxtel found a niche.
But the tech that enables the platform to stream 38 concurrent live events at once shouldn’t be slept on. It’s a massive investment from the company.
“We’re quite proud that we’ve built it and made here in Australia,” he added.
With how expensive streaming services in Australia are once you add the cost of them all up, it’s important for companies to keep innovating to make sure they don’t fall behind. Or that they don’t have subscribers drop like flies.
Wigan would argue the answer lies in technology.
“It’s a fine line, isn’t it?,” he pondered. “We have become a really big technology company.”
He told Gizmodo Australia that all parts of the business, including the Fox Sports production team, all work closely.
“Our primary goal is, ‘How do we take the sports fan closer to the game?’,” he said. “That’s why we’ve doubled down on 4K … it is a very nice experience and you get to kind of feel like you’re literally at the game, you can see the faces on the crowd and so forth.”
But it’s also the innovations on the field such as the Fox Rover and Flying Fox camera, which is an aerial camera that I must mention looks super cool from the stands.
“I guess we’re just guided by those principles, ‘Is it enhancing the fan experience or is it actually interrupting their experience?’ and you have to just make a judgement call on those things,” Wigan explained.
Kayo was built and launched in 11 months, but Foxtel Group had been investing in the back-end tech and the video pipeline, all of the cloud infrastructure and IP, for a number of years before that.
“We were all working towards a vision of what might be something like Kayo,” Wigan said. “We always had that in the back of our minds.”
But that doesn’t mean Foxtel Group is going to jump on the gimmicks just yet. In fact, Wigan himself is in “two minds” about this whole metaverse thing. He said the potential of AR is obvious, but it’s the execution and how that benefits the fans that will be the next kind of evolution or innovation to bring sports fans a bit closer together.
“We’ve got ideas and thoughts on it, but I wouldn’t say we have anything substantive just yet, but it’s where we are spending a lot of time thinking,” he teased.
I’ll pass on the metaverse. I just want a stream that stays open on Saturday allowing all three NRL games to be played without returning back to the home page. But opinions aside, as long as Kayo keeps the customer front of mind, it might just have its place solidified in a saturated streaming market for many years to come.