The 24-year-old Aussie cable TV network Foxtel has inked a deal with US streaming giant Netflix in a partnership that will impact the millions of Australians who subscribe to both content services.
“The proliferation of cheap streaming video services led by Netflix in recent years has provided the biggest challenge yet to Foxtel’s traditional business model,” Roy Morgan CEO Michele Levine said in a statement pre-empting the deal.
So it’s a little unusual to see the competitors teaming up in this way.
But putting aside media rivalries and partnerships, here’s what it means for you:
What it means for existing Foxtel subscribers
If you are one of the 5 million Australians who have a household subscription to Foxtel, you’ll now be able to access Netflix content via your Foxtel box.
That access will be free for six months, but only if you re-contract for 12 months before September 2019 and have a package that costs more than $49 per month.
Foxtel CEO Patrick Delany told a press conference in Sydney on Wednesday the US streaming service’s content will be “seamlessly integrated” and accessible via a newfangled remote control with a Netflix button.
You will also gain access to 16,000 hours of on-demand content, which includes Netflix content. Foxtel will also be adding SBS content to the service.
Foxtel customers with version iQ4 will begin gaining access to the new features immediately, with the rollout expected to be completed in August, according to a statement from Foxtel. Subscribers who have the previous iQ3 version will gain access between September and November.
“Foxtel customers do not need to do anything to enjoy The New Foxtel Experience,” the statement said, explaining that software enhancements will be managed remotely.
However, the remote featuring the Netflix button will only be free for Foxtel customers who have been customers for more than eight years, according to Gizmodo Australia.
“Customers who have been using the services between three and eight years can get it discounted for $29,” the report said. “For customers who have been with Foxtel for less than three years will need to pay $49 if they want the new remote.”
What it means for would-be Foxtel subscribers
It means Foxtel wants your money.
With only 5 million Aussies having access to the cable network, statistically you’re more likely to be a non-subscriber. And the Netflix integration seems to be all about hooking you as a Foxtel customer.
The cable TV network has announced a new “sport, drama and entertainment” package for $58 per month — well below the $78 per month cost this package usually attracts – and will throw in Netflix for free for six months.
After this period, they will face normal Netflix fees of $13.99 a month for HD or $17.99 a month for 4K on top of their Foxtel subscription unless they cancel.
New customers on all packages above $49 will also get a six-month Netflix standard plan subscription for free.
Roy Morgan has speculated that the free Netflix offer is part of an “effort to drive new subscriptions”.
What it means for Netflix subscribers who don’t have Foxtel
In its note distributed on Tuesday, Roy Morgan said the slated partnership could be a two-way deal, with benefits for Netflix users who might want to access Foxtel.
“For Netflix the ability to link up with Foxtel’s News and Sport services and be a frictionless option for the 2 million Foxtel viewers who don’t currently access Netflix is an opportunity for growth in a market which may be reaching maturity,” the researcher said.
But despite the growth opportunity for Netflix, Delany did not make any announcement of a special deal or discount for existing Netflix subscribers.
Business Insider Australia has put questions to both Foxtel and Netflix about whether any discount or special Foxtel offer may be made available to Netflix subscribers under the terms of the deal.
What it means for the general content-consuming public
Not much, at this stage.
Foxtel’s decision to give customers access to a competitor’s content is a big deal, especially as Roy Morgan has said Netflix is the one eating the Aussie cable network’s lunch.
And Netflix is not alone. Roy Morgan also pointed out that 3 million Australians already subscribe to the Nine-owned Stan streaming service, and said Netflix rivals like Amazon Prime Video and Google-owned YouTube Premium are “growing quickly”.
With this changing tide, consumers can expect more partnerships and integration between traditional enemies, giving them more content options and putting them in the driver’s seat.
Desperate times call for some pretty interesting deals.
Disclosure: Business Insider Australia is operated by the Pedestrian Group, a wholly-owned subsidiary of Nine Entertainment Co.
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