It’s on: Foxtel to meet IPTV challenge head-on


analysis Most of Australia’s younger generation of Internet-focused media consumers probably think Pay TV giant Foxtel is merely a blast from the past; a mouldering old dinosaur with no tricks left up its sleeve. But if revelations by the company last week are any indication, Foxtel ‘gets’ the Internet and has exactly the right moves planned to tackle it.

Right now, if you want to consume any of Foxtel’s services (the pay TV giant is well-known for its strengths in complete sports broadcasting, but also holds the local rights to a number of major US television shows such as Game of Thrones and the Comedy Channel), you have very limited options to do so. Ideally, you’ll get a HFC cable connection from Telstra that will allow you to connect to the company’s network. There’s also satellite, and Foxtel has recently opened up its content slightly to those with Telstra’s T-Box or Microsoft’s Xbox 360 platforms, but in general it’s all still locked down; only on certain platforms or certain networks.

But several announcements made last week by Foxtel chief executive Richard Freudenstein have the potential to change all of that — and in short order.

The most high-profile move which Foxtel will take, from June this year, will be to allow customers using any platform on any fixed-line broadband or 3G/4G mobile connection, to access its content on a subscription basis. It’s called Foxtel Play (see the full media release here in PDF format), and for those who have been locked out of Foxtel’s content up until now for one reason or another, it’s pretty much content nirvana.

Even better, the service comes with no lock-in contracts of the type which Foxtel has historically preferred, and it’ll feature what appears to be most of Foxtel’s content: 40 channels and more than 2,000 video on demand titles. An associated movie on demand service is also slated to launch later this year.

In a speech last week to the ASTRA (Subscription Television Australia) conference (see the full speech here in Word format), Freudenstein had this to say about Foxtel Play: “Ideally, once they have sampled Foxtel Play, customers will realise how great the service is and sign up to the full Foxtel product … this represents an opportunity to introduce Foxtel to a whole new customer segment.”

We couldn’t agree more. The audience for Foxtel Play, which we anticipate will demonstrate great interest in the service, is pretty clear: Young people such as myself who have never felt any great interest in Foxtel previously because of its restrictive nature and the fact that it just hasn’t run on the platforms which we like to consume our media on. And when I say ‘young’, what I really mean is anyone around the age of 30 or below — so actually not that young.

Freudenstein is clearly hoping that that audience will experiment with Play and then move onto the full Foxtel experience; however my prediction is that those who do like Play will merely ignore the full Foxtel world and just continue to use Play however they like, wherever and whenever they like.

Now, the development of Play and its associated movies on demand service is revolution enough for Foxtel. The result of what must have been a sustained development effort, it takes Foxtel and its clutch of content directly to the doors of the new Internet generation and by itself shows the company isn’t as much of a stick in the mud as many people might have believed. However, it’s far from being the only thing which the Pay TV giant has up its sleeve.

In the same speech last week, Freudenstein outlined a range of other technological initiatives which Foxtel has been working on to please the Internet generation.

One of those is an enhancement to Foxtel’s electronic program guide which will enable Australins to go back in time to watch or record programs they’ve missed; after they’ve aired. “So if you are at work and hear about that great program you missed last night, you can go home, go back in time and watch it,” said Freudenstein. “This is a perfect example of a seamless combination of broadcast and broadband to create a better viewing experience.”

Foxtel has also organised a deal with social television company zeebox, which will allow Foxtel users to connect with others watching the same programs at the same time. This kind of social interaction connected with television watching is becoming increasingly popular as smartphones and tablets are making their way into loungerooms, functioning as second screens for ancillary information delivered alongside traditional television programming.

Then there’s the iQ3 set-top box which Foxtel is working on. Freudenstein told the ASTRA conference that the device will have ten times the processing power and eight times more memory than its current box, with eight satellite or cable TV tuners built in, and in the satellite version, two terrestrial tuners.

“With today’s iQHD you can watch one program while recording two others,” said Freudenstein. “The new iQ3 will allow you to watch one show while you record up to four others. Foxtel’s iQ3 will have capacity for a one terabyte hard drive. It will use the latest generation WiFi technology to enable easy connectivity to the customer’s gateway router. The inclusion of Bluetooth technology will also allow us to support the latest remote control devices.”

But this still isn’t all.

Freudenstein also noted that Foxtel was actively considering launching a so-called ‘triple play’ service, consisting of video, broadband and voice telephony. To a certain extent it already does this through its partnership with its part-owner Telstra, but its own branded service would take the concept further and particularly make sense as the National Broadband Network continues to roll out around Australia and Telstra loses its HFC cable network advantages.

“Indeed, Telstra’s CEO David Thodey has publicly indicated support for the idea of a Foxtel triple play,” said Freudenstein. “While I’m not in a position to make an announcement today I can confirm that it is under active consideration. We believe that a triple play offering makes a lot of sense for our business and our customers as can be seen from the success of other subscription broadcasters which have adopted this model around the world. Together with iQ3, it would place Foxtel firmly at the centre of the broadband connected home.”

And even when it comes to the timely importing of international content, Foxtel is conscious of the needs of the demands of the Australian audience, who have complained bitterly about the delay in the local availability of flagship shows such as HBO’s Game of Thrones.

“We realise that in a connected world everyone expects delivery of content to be simultaneous and seamless, no matter where you are,” said Freudenstein. “Our subscribers can join global conversations about Game of Thrones, Mad Men, The Carrie Diaries, Revolution, The Walking Dead, Boardwalk Empire and so many more, because we show them immediately after they have gone to air in their home markets.”

Not everything Freudenstein said last week was positive. In particular, many Australians will have been angered by the widely reported comments he made about the need for the Government to crack down on Internet piracy. Research has shown that Australians are some of the most prolific pirates of popular shows such as Game of Thrones — because they haven’t always been made available locally in a timely fashion.

“We will be calling on both the Government and Opposition to develop policies that protect copyright owners and ensure the viability of the content creation industries,” said Freudenstein.

However, in general the Foxtel chief executive’s message was overwhelmingly positive. At the moment, on almost every front possible, the pay TV giant which many had long ago consigned to restrictive, lock-in obsolescence appears to be fighting to make its content available everywhere, to every platform, and through methods which the next generation of Internet consumers approve of.

None of this is to say that Foxtel is guaranteed to succeed with its new generation of Internet-connected initiatives. Probably the company’s biggest challenger in the Australian market (given the fact that Quickflix continues to suffer from financial problems at the moment) is likely to be FetchTV, which produces a set-top box IPTV/PVR and video on demand platform now integrated with sizable ISPs iiNet, Adam Internet and Optus.

FetchTV recently launched the second generation of its set-top boxes, which have been completely revamped, with a new physical design and a large amount of new features (in fact, in our demonstration several weeks ago, we found it hard to think of a feature the new FetchTV boxes didn’t have). Over the next week we’ll evaluate FetchTV’s new service in a comprehensive review, and we think readers will very much like what we have to say about the platform.

However, with Freudenstein’s revelations last week, Foxtel revealed that it’s not simply going to lose its grip on the Australian content market to challengers such as FetchTV without a fight. The company appears to have placed its bets in all the right areas, and Freudenstein and his team clearly understand the emerging IPTV/video on demand space very well and how the Internet is changing everything. This is great news: Australian consumers can only benefit.

Image credit: Screenshot of Foxtel Go (to become Foxtel Play)


  1. Yay! Competition! Hopefully we see more of it soon in the sector, particularly with enabling technologies like multicast on the NBN.

    • +1

      I think we are about to see a flat-out war between FetchTV and Foxtel, with Telstra’s T-Box also playing a role. FetchTV has a much better platform than Foxtel, but Foxtel has the advantage of legacy and scale. It will be interesting to see how it pans out in the long-term.

      • Saw your twitter comments about the Fetch service being awesome. do you have access to newer software or just the new box. New box seems to be available to IInet subscribers but no rave reviews yet.

        Most interested in whether they have solved the biggest problem though – content. Fox still have all the sport and all the shows worth watching, at least from what i can see on the fetch website. Unless you are really into Geordie Shore?

        • Both the software and the hardware in the new box have been revamped, and they have also gotten access to a lot more content — and a stack more coming. My personal view is that eventually they will have access to almost *all* the content in a few years ;)

          I’ve got the new Fetch box at home now and expect a review in about a week.

  2. Without all the Sports channels being on This new ‘play service’ forget about me ever subscribing to it. The reason a lot of people dont have foxtel is called apartment blocks/Strata. And they want sport! Not that half hearted attempt on Xbox and smasung TV’s called fox Sports play.

    • Foxtel just revamped the sports offering for Foxtel on Xbox360. The Sports Pack now includes Fox Sports 1, 2 & 3, Speed, ESPN & ESPN 2, Eurosport, Fuel TV, and Fox Footy Play.

      There is still a great divide between the full Foxtel package, and the offering on Xbox360, but I’m happy with the new sports pack.

  3. I tried foxtel on my xbox when they gave away a free month
    It worked great as long as no one else used the internet
    the second someone jumped on the net to do something you could not watch any TV and this was on a 16mb DSL connection.

    Was going to wait for the NBN before i looked into it again, but we all know the NBN might never happen now

    • This isn’t a speed problem and you’ll probably have the same issue if you get the NBN.

      You need to get a good router and tune your QoS for the Foxtel data (just as you would with VOIP). the video stream does need good bandwidth (which you do have) it just also needs to have packet priority over other data streams that are sharing the same link.

      I assume you were using a wired connection and not WiFi in the house?

  4. They lost me when they started saying 40 Channels of IPTV I don’t want any channels I want a Netflix equivalent not the same old crap on a different screen and then there is the cost from $25 which means $75 to get everything compared to Netflix which is $7.99 this is basically a 10 times markup.

    Unfortunately I am an Adelaide supporter in Melbourne so if I want to see my team play a game I need some form of Foxtel so I have xBox and will suspend it during the off season it is a rip off at $50 a month all I want is football I would pay Bigpond $30 a month just for the football if it was possible but they don’t want my money.

    So IMHO Foxtel can shove it where the sun does not shine!

    • Telstra’s AFL and NRL Live apps are alright value at $15/month. I run the NRL Android app over wifi on my phone connected to my TV. Better than listening to the radio.

    • Agreed. Signed up and tried it on the weekend. Library is great but I have a poor connection – so I only got the low quality stream. When I move out (hopefully to NBN-land), I’ll maintain a sub.

      (But even low quality Netflix is better than Foxtel 360 rubbish)
      Netflix is compelling enough to cease building my media ‘library’, especially if you don’t care about sportsball.

  5. i’m not holding out much hope for foxtel delivered by nbn any time soon.

    it seems their IQ3 box is still heavily geared towards satellite and HFC, unless it comes with a data port that allows full foxtel streaming instead of just on demand stuff.

    i was hoping they might have had an nbn delivered product by the time my house is completed later this year, but i guess i’ll be sticking an ugly as fuck satellite dish on my roof after all.

  6. AJ – Agreed. I want something like Netflix where I choose what I want to watch and not some bunch of pre-programmed IPTV channels with mostly useless content. I guess its ok to have those channels as an option if the main emphasis was quality on-demand content. Get with the times Foxtel. Also, pricing in Australia is always higher and we basically get ripped off – though I suspect many people don’t realise.

  7. The main reason i got turned off foxtel was the $100 subscription to watch advertisements.
    and i know many many people feel the same way. so unless they reduce the amount of interuptions, and advertising during “PAID” content. then i still dont see people adopting this, or anything foxtel introduce into the market.

    P.S bring back the comedy centrals “Naked News”

  8. Foxtel Play sounds interesting.

    One thing that has always caused me to not look at Foxtel is the packages. I look at the basic package and think…. I’m paying X amount of money for channels i will never ever watch and channels i will watch.

    I’ve always thought that if (and i’ve asked many friends/people about it too) that if Foxtel was to have a ‘pay-per-channel’ set up, they would get loads of new people in, people who get all the channels they do want, and none of the crap like sports and news.

    For me, Foxtel means Kids channels, science, documentary, movies and maybe music, no news, no sports at all.

    Foxtel on a telstra mobile phone/table is limited in the channels you can get and suffers from the same stupid model.

    If Foxtel Play becomes free-quota access with my ISP, and it doesn’t suck like their current pricing models, i’lll take a more serious look at it, but even if i go with Foxtel Play, i still will never go with Foxtel itself because of those pricing model issues.

  9. If Netflix was available locally at US price points I would get it in a heartbeat. If BBC iPlayer was available here as a subscription at similar cost to Netflix I wouldn’t hesitate for a second. But Foxtel and FetchTV are a price gouging joke. And FTA TV here is a low quality mess – most of the programs we’ve watched on the past few years change their timeslot without notice (including TV guides and website) after the first few weeks. Given the horribly compressed garbage that passes for ‘catch up’ IPTV here, the only way to even watch most shows in the high quality version they were recorded in is to download them.

    I keep hearing the moaning from ‘content licensers’ and TV companies about the impossibility of competing with ‘free’ pirated content. But the reality is you don’t have to compete with free – you have to compete with offerings available in other countries like NetFlix. That’s a business model that’s able to compete and unless Australians get a similar service they will feel justified shafting the companies that are shafting us with their ridiculously overpriced, low quality offerings.

  10. When will Telstra allow us T-Box users to record Foxtel shows?

    If I am restricted to watch say ‘Game of Thrones’ when Foxtel broadcasts it I might as well download it.

    If I can record it and watch it when I want then that is a different story.

    I also want to be able to tell my T-Box to record every new episode when Foxtel airs it automatically.

  11. “But if revelations by the company last week are any indication, Foxtel ‘gets’ the Internet and has exactly the right moves planned to tackle it.”

    Yeah, it’s called Old Uncle Rupe buying the LNP and telling them to scrap the NBN.

  12. Whilst i’d like to believe this, for the last oh say ten years many people/companies have said they will offer content that rivals P2P.

    Ten years on, lets just say I don’t have Foxtel.

    I have great hopes for Fetch, and I hope that it does improve greatly. My concern is that with all the extra content it gets, it ups the price accordingly.

    Like all business in Australia, too many middle men wanting to skim a little bit more off the top.

    • Also i’d like to add that the chances of Adam selling Fetch in the long term seems unlikely IMO, with the selling to Telstra and all.

      Typo: “One of those is an enhancement to Foxtel’s electronic program guide which will enable Australins”

    • “Like all business in Australia, too many middle men wanting to skim a little bit more off the top.”


      It continues to amaze me how ignorant/in denial most Australians are about this phenomenon. Australians are generally lazy and greedy with an overdeveloped sense of entitlement. Not all, but enough to be obvious and for us to have a reputation for it with foreigners. It’s the underlying problem with the price of imported goods that’s under the spotlight at the moment – greedy distributors who consider it their right to make 30 to 40% on goods the manufacturer is only making 35% margin on. And then the retail trade association has the gall to demand the Govt step in and legislatively force consumers to pay so much more tax that their onerous markups actually seem competitive.

      You want cheaper prices? Cut the Australians out of the equation. Only once there is real transparency towards local markups can we have meaningful diacussions about pricing practices of overseas suppliers and manufacturers (and in this case, content owners).

  13. I’m skeptical about foxtel making its content available on “any platform” when they continue to deny the existence of android as a real alternative to ios – why haven’t they developed any content apps for android??

    im a full fee paying foxtel subscriber but you wont find an idevice in my broadband connected house.

    • Did you read the linked press release? “From launch Foxtel Play customers will be enabled to receive the revolutionary Foxtel Go, included with their subscription, on their compatible PCs, Macs, iOS and selected android smartphones and tablets showing their entitled channels based on the channels they subscribe to on the Foxtel Play service.”

  14. Let’s all not get carried away here, after all we are still paying far too much for Pay TV Services in this country.

    The likes of Foxtel in particular have taken the Australian Public for a ride for far too long and once the NBN comes to fruition, hopefully then the power will be within our grasp.

    If you think I am being a little over dramatic let’s breakdown exactly what we are paying for digital content in this country vs. what the Americans pay for digital content.

    Firstly, there is a huge difference in the number of channels available to us. Foxtel offer a total of 86 channels on their premium package for $110.00/m, whereas Direct TV in the US offer a total of 285+ channels on their premium package for $91.99/m. That means that we are paying $1.28 per channel per month, whereas the Americans are paying $0.32 per channel per month.

    Then there is the set-top-box fee. If you want additional outlets on Foxtel then you are going to be paying an additional fee of between $15 – $25 extra per month. The Americans get a set-top-box that automatically lets you watch content in four rooms at the same time for no extra fee! So when you take that little trinket into consideration you can easily pay an extra $45 – $75 per month in order to watch that content in different rooms.

    So let’s be hypothetical here (this is somewhat realistic given that children are staying at home longer these days before moving out). Let’s say that you want Pay TV on four TVs in your home and you want the top package. You are now looking at paying up to $185.00/m on Foxtel in order to get the same benefits offered in the US for free. Now your looking more like $2.15 per channel per month opposed to the $0.32 per channel per month offered in America.

    When you choose to bring this information to the attention of Foxtel all you get in return is a standardised response in a poor attempt to placate your dissatisfaction. In fact it is as if you had the audacity to bring such a complaint to their attention in the first place.

    I believe that the young people, of whom I am on the borderline, will give Foxtel the snubbing they so rightfully deserve. Foxtel are certainly not innovators, they certainly are not content kings, however they rely solely on the fact that they are the ONLY content providers of Pay TV Services in Australia and until that changes it is the consumer that will suffer.

    Just because they come up with some half-witted idea to offer other ways to consume their content doesn’t mean that they are ready to take on the NBN. The NBN will be able to open up all sorts of avenues for people to consume digital content without having to pander to the outrageous demands of the likes of Foxtel.

    People are already doing it now with proxy servers and setting up overseas accounts in order to obtain digital content. It is often far cheaper and you get access to the shows and on demand content that Foxtel takes weeks or even months to deliver in Australia.

    So I sit here laughing to myself that Foxtel think they have a plan, that they think they can tackle the internet, more specifically the NBN and their younger user base. Foxtel’s plan is rubbish and if anyone is serious about saving money and getting richer content, then they will utilise the NBN and look overseas for digital content. I know that I for one will be doing exactly that, setting up a proxy server and streaming digital content strait from the US or anywhere else in the world that offers digital content.

    The only way that Foxtel can get a win out of all of this is if the Coalition luddites win the Federal Election and send us back to the dark ages with their 1920’s telecommunications plan.

    So forgive my cynicism over Foxtel’s grand plans on content delivery, for it is worth about as much as the Euro at the moment… NOTHING! I say bring on the NBN and let’s decimate Foxtel’s business model and their overcharging monopolistic operations.

    • “Foxtel offer a total of 86 channels on their premium package for $110.00/m, whereas Direct TV in the US offer a total of 285+ channels on their premium package for $91.99/m. That means that we are paying $1.28 per channel per month, whereas the Americans are paying $0.32 per channel per month.”

      I’m not sure that’s entirely a fair way of making the comparison. Of the 86 channels, how many would you actually watch? Never how many of the 285 channels in the US.

      For the 15 channels that you actually watch, you’re paying $7.30 per channel on Foxtel, or $6.13 per channel in the US. Not as big a difference as in your calculation.

      • It’s about value for money Drew. Furthermore, how do you know that you wouldn’t watch more channels if they were available?

        With 285+ channels opposed to 86 and pay tv on four tvs for free opposed to one tv, there is far better value in the US than here. Therefore I think a comparison of this nature is not only fair, but it is also reasonable and relevant.

        • “how do you know that you wouldn’t watch more channels if they were available?”

          Because I’ve had them available, and didn’t watch them…

          • In that case, I for one would like to formally thank Foxtel for deciding which channels and shows I can view.

            I hate choice, and I am very happy to pay a large amount of cash for the lack of.

  15. The quality of Foxtel streaming on the xbox 360 is poor (even on the highest setting).

    It’s the quality I’d expect 10 years ago, now today.

    • The free to air networks similarly need a kick up the bum too! Most movies broadcast on OneHD and Gen (or Go) aren’t remotety near HD? Pixely crappola!

    • Don’t worry, the video quality on Foxtel proper isn’t that much better. For the price you’d expect it to be amazing – nope. It’s as low as they think they can get away with (to cram in more channels). It’s certainly worse looking than FTA on most channels.

  16. The revenue opportunities for Foxtel are limited by the bandwidth of end users, which is why the NBN is good for Foxtel.

    Even if Foxtel unbundles Sport, for instance, and charges $30-40 per month for it, this will mean massive increased revenue from 100% (insteadof 20%) of the population, and without having to maintain satellite or cable infrastructure, since NBNCo takes care of bandwidth up to the wall.

    When Malcolm Turnbull in 2010 predicted share price armageddon for Telstra it was $2.56, and it is now over $4.50. The all-fibre NBN is good for retail providers, including the incumbent copper monopolist.

    Telstra and News both know that Foxtel IPTV will be a winner on the NBN, notwithstanding the opportunities for competitors. This makes The Australian anti-NBN campaign look all the more stupid.

    Barnaby Joyce sounded the warning this morning that the coalition must be careful with every regional seat in September, or risks a minority government with Greens and Independents calling the shots. Broadband policy could kill their changes in regional Australia unless they continue with Labor’s (uncharacteristically?) excellent NBN project.

    And the rest of us can finally get Fox Sports.

  17. I disagree Renai, this is just painting over the cracks.
    1) People want Video On Demand, not a device which can record 8 channels simultaneously.
    2) Sport Sport Sport, that is the thing keeping pay TV alive.
    3) The future is Direct Subscription content, like NBA does. When Showtime, HBO, etc start offering direct subscriptions, let alone local Sports, then the game is over for pay TV.

    Foxtel is a traditional Australian monopoly, it offers poor value, poor service, poor delivery. I feel sorry for the poor customers who use it.

  18. I want a service that will offer a huge variety of shows, any of which I can select and start watching immediately. Whether I pay on a subscription basis, a per-show basis or some other method is not as important.

    This is what people want. Someone, at some point, will offer this – and will wipe the floor with the competition.

  19. Waaaaaaaait a minute – you mean Foxtel is actually trying to c…..c……ugh I’m having so much trouble using this word in association with Murdoch……..c-c-compete? Next you’ll be telling me about editorials in the Oz which praise the NBN.

  20. “The new iQ3 will allow you to watch one show while you record up to four others.”

    So what will the rest of the eight tuners be doing?

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