For years now Foxtel has had a monopoly on the Australian Subscription TV market. They had the ability to charge whatever they liked and provide content how they liked, and consumers had pretty much no other options.
Then come along streaming services such as Netflix and everyone thought it was the end of Foxtel.
With multiple new and cheaper providers coming into the market the assumption would be that Foxtel’s consumer numbers would head south. However Foxtel has managed to survive and some would even say thrive in a now ultra competitive environment.
In September 2014 Foxtel announced an almost 50% cut (news.com.au, 14 September 2014) to their entry level package prices amid the impending arrival of Netflix in Australia. This boosted Foxtel’s customers from 2.6 to 2.8 million by March 2015 (Redrup 2015).
Netflix arrived the next month and Foxtel have managed to keep their consumer numbers quite steady, with the streaming services only growing the market for subscription TV instead of diluting it, according to Roy Morgan Research (2015).
How have they done this?
Foxtel’s goal is simple. They want every Australian to be able to find something on TV they want to watch everytime they switch on. We know however from Iacobucci (2013, p.43) that a company can’t be all things to all people. So we segment the market, target those who have the needs that match our abilities to deliver and then position our product accordingly. And this is exactly what Foxtel have done.
If we were to segment the Subscription TV market, the most logical way to do this would be based on what they watch and therefore why they pay for TV. There would be the TV Show (Game of Thrones) addicts, who want to watch the latest episode of their favourite show as soon as it is aired. Then there would be families who may want a larger selection of children’s channels to keep the kids entertained.
But the outstanding segment would be the Sports Lovers. Sport is part of Australia’s culture. From the casual watchers who love to watch their team out on the G on a Sunday afternoon. To the absolute fanatics who want to watch every game of the AFL season every weekend, or wake up at 2am to watch the Premier League match between Manchester City and Manchester United. This is the segment that Foxtel can meet this needs of, and this is the segment they are targeting.
On first clicking to Foxtel’s website the whole banner of the front page is filled with an advertisement for three new sports channels.
Foxtel also launched the start of the 2016 winter sports season with a new marketing campaign “We’re a FoxSporting Nation”.
No other subscription TV provider in Australia has access to Live Sport. And foxtel has now made this available not just on the tv but have adapted with the changing market and have this available on Foxtel Go to stream across multiple devices. Sure you can stream other sports, there is AFL Pass or NRL Live but they are separate subsciptions to pay for and manage. And well Foxtel, it has it all in one place, and who doesn’t love convenience.
Foxtel’s long standing in the Australian market has given them a massive head start of other subscription TV providers. And despite the rise of new technoloiges and the changes in the way people consume their TV they have managed to stay comeptitive based purely on targeting a segment of the market other providers can’t service.
Iacobucci, D 2013 Marketing Management, South-Western Learning, Ohio, USA
Redrup, Y 2015 ’30 percent of Foxtel subscribers are considering ditching the service for streaming’ Financial Review, 25 May 2015, retrieved 6 April, 2016 <http://www.afr.com/technology/30-per-cent-of-foxtel-subscribers-are-considering-ditching-service-for-streaming-20150524-gh8ee9>
Roy Morgan Research 2015, Netflix reaches 1.89 millian Australian. Foxtel loses share (but not size) as Netflix expands pay and subscription TV market, Roy Morgan Research <http://www.roymorgan.com/findings/6389-netflix-expands-market-foxtel-steady-australia-pay-tv-svod-july-2015-201508102349>
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