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Foxtel v Choice: it’s war over the cost to subscribe to Pay TV.

Foxtel hits back at strategic remarks by Choice that content costs up to 431% more in Australia than the US.

2014-07-07_2055Foxtel has hit back at remarks by Choice magazine after it compared pricing for content and used Orange is the New Black and The Walking Dead as examples.

“Australians wanting to watch the upcoming season of Walking Dead will be paying up to 376 per cent more than people watching the same show in the United Kingdom,” said Choice Chief Executive Alan Kirkland.

“Season 2 of the popular Netflix series Orange is the New Black currently costs Australians a minimum of $27.26 through Google Play, 219 per cent more than what US Netflix customers pay. Consumers will pay up to 431 per cent more to access the show through Foxtel.”

It follows on from recent Choice articles about legal ways down access content internationally, such as via a VPN.

“The internet has made affordable content possible but Australian providers are not delivering,” he said.

Choice also cited new Steven Soderbergh drama The Knick from Cinemaxx has having no Australian airdate as yet.

Slow-tracking or Express? Foxtel explains Programming strategy.

The article has led to wider reporting, including in Fairfax, that suggests Australians Pay up to 431% more for TV shows online.

But Foxtel has hit back at “disingenuous and hypocritical” claims, given that its subscription model is based on channel packages rather than single titles, while pointedly noting that Choice also publishes content via a subscription model.

“Choice have made invalid comparisons between completely different products to justify their claims,” said Bruce Meagher Group Director of Corporate Affairs at Foxtel.

“To compare Foxtel’s service with that of Netflix in the US is nonsensical. Netflix is essentially a library service which, due to its success, has been able to commission a few high quality and popular dramas. So while it is true that consumers can get access to Orange is the New Black and House of Cards as part of their Netflix subscription that’s basically where the new content offering ends.

“To acquire other new dramas US consumers have to sign up to different service providers, and given that drama lovers don’t just watch one show, this is what they inevitably do.

“As part of a Foxtel service consumers can get access to virtually every major new US drama produced, usually within hours of its American broadcast. They also get a huge range of UK dramas, Australian dramas especially commissioned by Foxtel, plus a host of other general entertainment, sport, documentary, news and kids programming.

“To acquire a similar cable or satellite subscription service in the US, consumers would pay a similar price and depending on the bundle structure offered by particular suppliers sometimes more,” he said.

The claims also come on the day that Foxtel is launching an acclaimed local drama, Devil’s Playground.

“If free to air or subscription broadcasters were not able to aggregate the best international content to attract eyeballs for advertisers or subscription revenues we would not have the resources to invest in Australian content and the TV production sector would largely collapse,” he said.

Likening the magazine’s own bundle model through its magazine and online, he added, “Many Choice reports can only be viewed by subscribers and many others are available at a one off charge equal to almost three months’ subscription, if you ask for one over the phone, the kindly Choice staff member will advise you that you’d be better off buying a subscription!”

In the recent TV Tonight Audience Inventory of some 1000 readers, 43% of readers indicated they were current Foxtel subscribers. The biggest issue concerning subscribers was the need for more flexible packages, both amongst current subscribers and potential new customers. 9% of readers indicated they were open to the idea of subscribing, subject to packages, and preferring a full installation over the boutique Foxtel Play.

Last week Foxtel announced a new $25 package, although it doesn’t include any of the titles mentioned here.

20 Responses

  1. @victor -You are spot on. Foxtel sure aren’t a hot bed of creativity. Their latest productions are spin offs or UK formats such as Selling Houses Australia. It’s great if Australian crews are getting work but what a shame Foxtel doesn’t commission bold thought provoking drama that is worth paying for. We have talent in this country and we have stories to tell but the gatekeepers prefer to play it safe and make shows that have been done before. The exception might be the new series The Kettering Incident coming soon.

  2. Bruce Meagher’s defence of the Foxtel model is laughable. Foxtel makes on average one Australian drama a year. Under legislation predominantly drama channels on PAYTV must spend 10% of their acquisitions budget on Australian drama. Foxtel fiercely resisted even this modest impost. And as for the claim of the local production sector largely collapsing if Foxtel didn’t produce local content, this statement must have the free to air channels laughing in the aisles. It is the free to airs who overwhelmingly carry the cost of local production and in particular the very expensive drama end of production. PAYTV always was and will continue to be a vehicle for cheaply licensed foreign product except for local sports which drives subscriptions and news. Even the local lifestyle programs are nearly all adaptations of foreign shows. Hardly a hot bed of creativity.

  3. Australians always get ripped off. Grocery, Media , Cars etc. When it comes to the Media it is because of a lack of competition. When pay tv came to oz it had 3 or 4 competitors. Galaxy, Optus, Foxtel and Austar. Galaxy folded first. Then Optus and Foxtel signed a content sharing agreement about 13 years ago and more recently Foxtel baught out Austar. In terms of IPTV there is also lack of comepetition Optus and Fetch, Telstra and Foxtel both expensive. The fact they can not properly offer what people want is also a problem.

  4. @Cam Reed – excellent argument! Exactly right, if the services are so different why are Foxtel feeling so threatened? Perhaps because those services are better than the overpriced ad-filled Foxtel. Can’t wait til Foxtel becomes obsolete will be just desserts for Rupert Murdoch trying to be the ‘Wizard of Oz’ of our government and media. And for clinging so desperately to an outdated model.

  5. Australia isn’t a large enough market to support multiple cable networks, that’s why Oputnet and Austar sold out to Foxtel.

    Foxtel isn’t value for money if you only want to watch a few shows. But if you want to watch lots of HBO, AMC, FX, Showtime, Cinemax, Bravo and Starz and US shows that FTA network don’t pick up then it makes sense.

    If internet services suit you better then use them.

    BBC content is available for free if you can get around their geoblock which will be a problem for them.

    Foxtel will face competition from internet services, which is why they are cutting their prices.

  6. @laurie – No Netflix, Hulu and Yahoo Screen will not give you AFL in HD just TV Shows and Movies in full HD. Foxtel and those services are different and people like me are happy to go with those other services because having something akin to how music works with Spotify, Moog and Rdio is just the ticket (and many of us aren’t that keen on sport).

    To go with Foxtel just to watch Orange Is The New Black, House Of Cards, possibly soon Community (as it will be made by Yahoo Screen) and etc., is not worth the cost to just watch 6 or so spread over a year. Some of the other shows that end up on Hulu or Netflix or Yahoo Screen the day after US screen them like Covert Affairs, Bates Motel, Suits, Hannibal, Saturday Night Live and the like are the other reason to have it. For US$5 for a VPN, US$8 for Netflix and US $8 for Hulu Plus at a total of US$21 per month (AU$23 pm), it is just what I…

  7. Foxtel are fooling themselves and trying to use a form of propaganda to convince the average Australian, and the average Australian hating Liberal government that they should be allowed to hold an unfair monopoly on programming in Australia.

    To get all these popular boutique titles in first run you have to subscribe to the top tier packaging which costs a ridiculous amount of money.

    Foxtel has not been value for money since they were allowed to air advertising and recent announcements about slight cost cuts to overly exorbitant fees is just designed to get the Libs onside in Foxtels unsympathetic war against the average Australian.

    And nearly 20 years since they launched, they still refuse to run an Australian Only content channel of new & classic series. Overall Australian content (new & old) across Foxtel channels is almost non-existent, when they should be…

  8. If comparing Netflix to Foxtel is like comparing apples to oranges, then Foxtel shouldn’t mind Choice’s push to have the grey area of receiving content via the web from Netflix, Hulu, Yahoo Screen and etc., without needing a VPN then.

    Two different products in Foxtel’s words, so they shouls join in supporting letting the rest of us use what Foxtel call essentially a library service without having to do the VPN work around.

    Years ago the ACCC got a ruling that Region locked DVD’s were hurting the consumers hip pocket in Australia and we got region unlocked DVD players (and gaming consoles), time for the same to happen to geo-blocking of TV Services.

  9. Yes, I pay Foxtel over $100 per month for the Platinum package.
    How delighted am I to watch The Walking Dead on the FX channel, complete with embedded advertisements?
    No, not happy at all.
    Anything on FX is full of ads.
    I’m looking into getting a VPN and cancelling my Foxtel sub.

  10. What can you say, foxtel have the monopoly in Australia, so they can charge whatever they want.

    Australians are being ripped off with almost everything… books, software, music, games, movies, tv shows, jewellery, iTunes, pay tv, shoes, clothes, travel, online subscriptions, tools…

    Buying wisely over the internet can save anyone a small fortune. That’s why from the biggest to the smallest, Australian retailers are worried. Businesses with no online presence, are failing to attract the highest potential of customers.

    Faster internet brings Australians more options, which is scaring Foxtel; as online streaming of media content is already happening, and is a thing of the future. Foxtel now have to play catchup, by reducing their prices, and offering better value for money.

    As to pay-tv subscription comparison, a google search of UK, US, Asia & UAE pay-tv providers,…

  11. The fact remains if you want to watch quality programmes on pay tv like on show time and BBC first you would need to spend around a $100 a month . $25 a month will get you garbage that you can easily find on the FTA digital channels , plus foxtel needs to come clean on the matter of adds .there are a lot more adds nowadays than when I use to subscribe .the adds are way too frequent more so than on FTA .i refuse to pay to watch tv and have to put up with advertising as well . Its just not worth .

  12. And unlike Foxtel, Netflix doesn’t show endless commercials off life or funeral insurance.

    The price of shows such as GOT, Girls and other HBO content on iTunes (now delayed thanks to cushy deals with Foxtel) also needs to be examined. $40+ for series with no physical product is a joke.

  13. Why would you want to pay a huge cost for Foxtel, getting a bunch of shows you don’t want so you can watch a few that you do – mind you, later than others and with ads? Doesn’t make sense. Its disgusting that they think they can rip us off. Thank God there are cheaper alternatives. Foxtel and the others deserve to fail.

  14. Have to agree with Foxtel here, completely ridiculous comparison by Choice.

    Next they will be telling us that you could buy this bathroom for $20k, but you are forced to buy the whole house for $500k.

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