Guess what, Foxtel, 50% owned by News Corp and managed by its appointees (Telstra has the other half, it reports its results on Thursday), is now being managed for subscription growth, according to News CEO Robert Thomson, with a solid dose of cost control. Revenue is being sacrificed to keep subscriber numbers rising for both the regular Foxtel offering and the Presto streaming-video joint venture with Seven.

Speaking during a post-results briefing, Thomson said Foxtel had a 5% rise in cable and satellite subscribers in the year to June 30, but the churn (the loss of subscribers that have to be replaced) soared to more than 14% in the year from just under 10% as people who had signed up on a no contract basis, failed to renew. Both Thomson and News CFO Bedi Singh made it clear that Foxtel was being managed to “drive subscriber numbers” and control costs.

“Foxtel will remain focused on increasing subscriptions,” Thomson told the briefing.

News said Foxtel had “more than 2.9 million” subscribers, but again there was no breakdown between cable and satellite subscribers and those subscribing to the Presto streaming video joint venture owned with Seven West Media. News said the average revenue per user (a key metric for subscription TV) fell 3% to US$89 in the year. That underlines how the pay TV operator is being run for subscriber numbers and not earnings and revenue growth.

Peter Fray

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