Foxtel: We have competition too

By David Knox on July 22, 2011 / Filed Under Pay TV 11

Foxtel has responded to today’s Statement of Issues released by the ACCC which has delayed any ruling on its takeover bid of Austar.

The ACCC Statement is not a decision but part of a review process that raises preliminary competition issues.

A Foxtel statement today said:

Foxtel remains confident that the proposed transaction does not substantially lessen competition in any market and Foxtel will respond to the ACCC as part of its ongoing process.

Foxtel believes the transaction will not lead to a lessening of competition in the retail market.

The retail market is highly competitive. Foxtel faces vigorous competition from the reinvigorated commercial and national broadcasters and their digital multi-channels, new IPTV and on-line competitors such as streaming services over broadband networks (such as Fetch TV), ISPs that provide content themselves together with online movie rental and download services, and DVD rental and sales.

Competition in this market will only further increase in the future with developments in technology and the rollout of the NBN.

Foxtel believes that the content acquisition market is highly competitive. In Foxtel’s view, wholesale content suppliers have considerable countervailing power.

Merging the two companies will not have a negative impact on competition but will rather see Foxtel offering a range of consumer benefits including new digital services and investing around $600 million a year in new and original Australian content while continuing to employ thousands of people.

11 Comments »

  1. Charlie July 25, 2011 at 11:50 am -

    I think we all would prefer Foxtel (or Austar) to provide a pay-per-channel service but it won’t happen because it has not happened anywhere else in the world. The majority of subscription TV in the world is based on the US model which sells channels by the package. Only a few “premium” channels (read: the bloody expensive ones) are sold separately. Same with commercials. They all have them except “premium” channels.

    Bring on true “video on demand” with every TV show and movie in the catalogue!

  2. Shane July 25, 2011 at 9:01 am -

    I have no idea how hard this would be to do, but I could definitely see it working should it be able to be implemented. Foxtel should change its model from a “package” service to a “price per channel” service, allowing customers to pay for the channels they use and not the ones they don’t. I know that someone like myself would still have a lion’s share of the channel, and I’m pretty sure I’m not alone in that.

  3. troy July 25, 2011 at 5:45 am -

    re Hazel Comment on July 23, 2011 at 5:15 pm

    i total agree with you

    I’ve had austar i won’t reconnect it back up till foxtel takes over austar

  4. Hazel July 23, 2011 at 5:15 pm -

    If the ACCC don’t approve it, it’s time for the so called gentlemen ‘s agreement to be scrapped. I can only get Austar now, have had Foxtel in the past and would go back to them if I had the choice.
    It could end up like it happened with Galaxy in SA, the government wouldn’t approve that, then Galaxy went bust and Foxtel took over.

  5. Craig July 23, 2011 at 1:18 pm -

    I do see their point, with faster Internet will we need pay TV as it currently is provided?

    That said combining Austar and Foxtel will technically make it a monopoly for the current pay TV setup in this country, not that it isn’t already as there are very few areas where you have a choice who you want to go with.

  6. Sue July 23, 2011 at 11:47 am -

    James J, good point. There is an argument in loss of competition in terms of local factual productions.

  7. Rutzie July 23, 2011 at 9:20 am -

    What a load of crap from Foxtel. How about lowering the price of the Platinum HD package then if the competition is so fierce.

  8. Ashton July 22, 2011 at 7:38 pm -

    How about Australians get a choice on which service they prefer rather then being forced to choose the provider in their area! I’m sure AUSTAR would go broke if that happened, which is a good thing

  9. JamesJ July 22, 2011 at 6:36 pm -

    I don’t see an issue with it really… the ACMA are talking about Austar and Foxtel competing in the future — if they want to use that as a reason they need to enable that to occur now. If the merger went ahead I think it would be appropriate to either spin off XYZ Networks or put in place content access laws…

  10. Ann July 22, 2011 at 6:25 pm -

    The cost of Foxtel is getting out of hand, its my first cutback

  11. Armchair Analyst July 22, 2011 at 5:05 pm -

    Yes Foxtel does have competition from IPTV’s but so do the FTA networks and they are bound by competition and consumer laws so why shouldn’t Foxtel be. I would much like if the laws were strengthened or tightened to ensure that any media barron who is invested in pay tv can not buy shares in a free to air network.

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