Foxtel To Sell Sky Glass, Was The Next Step In The Company’s Move To Becoming An Aggregator For Entertainment.
News Corp-controlled Foxtel is planning to sell smart TV devices to customers in coming years under a new global agreement announced with Comcast-owned Sky that could eventually mark the end of the traditional set-top box. Foxtel is the first global syndication partner for Sky Glass, which is a smart television that will feature 4K TV. It is expected to be made available in late 2023. Foxtel Group chief executive Patrick Delany said the licensing deal – which will allow Foxtel to sell Sky Glass – was the next step in the company’s move to becoming an aggregator for entertainment. “It allows us to join a global product and technology roadmap created by Sky and Comcast, offering customers a world-class entertainment experience and devices, powered by Comcast’s global technology platform,” Mr Delany said.
Smart TVs, screens that connect directly to the internet, are now mainstream in Australia. According to figures from an Integral Ad Science report last year, eight in 10 consumers now have access to a smart TV in their home, and almost half of Australians prefer to stream video content on this device instead of mobile, desktop or tablets. Smart TV makers like Samsung, Toshiba and Sony currently determine how easy or difficult it is to find new programs or applications on their interfaces, which has been a pain point for free-to-air networks like Nine (owner of this publication), Seven and Ten. Local broadcasters are lobbying government to try and find a way to ensure they will take precedence over international services like Netflix and Amazon Prime Video on these devices.
But Foxtel appears to be taking matters into their hands. Under the plans, Foxtel’s streaming services Binge, Kayo Sports and soon-to-launch Flash, will be accessible from the interface alongside other applications. It will give Foxtel better control of the user experience and could allow the company, which is jointly owned by Telstra and News Corp, to reduce dependence on a set-top box altogether. The terms of the deal are unclear and there is still some time before the TVs are made available. Foxtel is expected to pay licence fees to Sky for the IP and would potentially need to pay a margin to retailers like Harvey Norman or JB HiFi. “Australian households expected to have an average of almost four entertainment streaming subscriptions by 2025,” Mr Delany said. “This solution will genuinely provide everything in one place for customers, along with even greater simplicity with a single premium device, easy buying, and a plug and play experience.”
The announcement is the latest for Foxtel, which is considering a float on the ASX early next year. Mr Delany and key executives from News Corp and Telstra appeared in front of current and potential investors last week in an attempt to provide more detail about the future of the company. It announced the launch of Flash, a news-focused streaming service, and the creation of an IQ5 set top box. It also plans to update software on the IQ4 in the next few months to allow it to run without a cable or satellite. Foxtel said last week had it had 4 million subscribers, with more than 50 per cent joining for the group’s new streaming products. But despite this growth, residential subscribers have fallen by 250,000 year-on-year and the COVID-19 lockdown restrictions have shut pubs and clubs, which are a key revenue driver. The average revenue per user for the quarter increased 4 per cent to $81.
The group reported $2.8 billion in total revenue in FY21, and earnings [before interest, tax, depreciation and amortisation] of $460 million. Foxtel also has significant debt. As of June 30, it owed about $914 million to several credit facilities and more than $1 billion to its two shareholders. Mr Delany said last week Foxtel was aiming to reach 5 million subscribers and $3 billion in revenue within the next three years. Sky’s announcement is its biggest hardware play since it would buy Comcast in 2018. The product allows customers to stream Sky TV and other content over the internet without the need for a box. The smallest option will be priced from £13 ($24.20) per month in the U.K. The medium option will be an additional £4 a month and the largest will be an extra £8. They can also be bought outright for £649, £849 and £1,049 respectively. But users will have to pay additional money to access Sky’s content through the TV.
This news was originally published at The Age