Foxtel is putting up a huge fight in the Netflix world

Photo: HBO

Foxtel’s total subscribers have risen from 2.6 million to nearly 2.9 million in the first half of 2016, a rise of 8.1%, despite analysts believing the entry of Netflix and its estimated 1 million Australian customers would spell hard times for the company.

The numbers outlined in Telstra’s half yearly results also show that Telstra, who owns 50% of Foxtel, had a 5.5% growth in revenue from their share in the company, bringing in $1.66 billion.

Customer sign ups through Telstra itself are up 17.9%, with the telco alone signing up 100,000 more customers in the half year.

More importantly though is that Foxtel’s churn rate is down 1.2 percentage points from 11.4%, meaning more subscribers are happy with the service and are sticking with it.

Telstra says this is a result of an increased investment in quality TV content.

Their IPTV subscriber number, which includes Foxtel on T-Box, Bigpond movies and Foxtel Presto is also up 17.9%, from 190,000 to 224,000. They don’t break up Presto from the rest, although it’s safe to assume it makes up the majority of the growth.

The growth in subscribers flows on from pricing and package changes that were introduced in November 2014. Effectively, the cost of subscribing to Foxtel was halved, with the base package adding more channels and dropping its price from $50 per month to $25 per month. A big investment in sporting content has also contributed.

These latest Foxtel results back up Citibank’s theory that it’s not Foxtel that will suffer from the introduction of streaming services, but rather the bottom line of free-to-air networks.

Roy Morgan has been running surveys to estimate Netflix’s impact on the market since it launch in Australia last March. In April 2015 it estimated Netflix had 286,000 subscribers, jumping to over 1 million by the end of 2015. But that growth in customers has mostly come from those who didn’t have Foxtel to begin with, with 1 in 7 Australian’s now believed to watch no free-to-air TV.

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