Tuesday, 16 June 2015

Will Netflix force Foxtel to unbundle channels?

I think the most interesting effects of disruptive services like Netflix will be the responses of traditional pay TV companies like Foxtel. When on-demand streaming TV is so popular that it's basically the Millennial version of pay TV, how does Foxtel respond? They've started offering on-demand services via their "Box Sets" service, but to compete on price and choice, I wonder if they will finally have to start offering a-la-carte channel choices.

Since the beginning of their existence, Foxtel (and basically every pay TV provider in the known universe) have gouged their customers by separating high-demand channels into different "bundle" packages. This means subscribers, who might just want Fox8, the Comedy Channel, Discovery and movies, need to pay for the "Basic" package, plus "Comedy", plus "Documentary", plus "Movies", all for significant additional monthly costs. But now that so much content is available on demand, and even individual channels like HBO are being sold as a stand-alone streaming service, the only way to compete with that is to offer individual channels for reduced prices or else die as a company.

They've already cut their subscription fees in half. I wonder how long it will take until The Great Unbundling.

Mokalus of Borg

PS - Or whether they will choose to die instead.
PPS - Or focus all their energy on building up Presto, their own streaming service.

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