After being stuck at around 30% since 2008, pay-TV penetration of Australian households is forecast to reach 35% by 2017- but most of that growth will come from IPTV services, not Foxtel.

That’s according to PwC’s Australian Entertainment and Media Outlook 2013-2017.

Foxtel’s subscriber base will increase at a much lower rate than IPTV services such as Fetch TV, Telstra Media’s BigPond Movies and Apple TV which are targeting the 70% of Australian homes that don’t subscribe to pay-TV, it says.

The subscription TV market will advance at a compound annual growth rate of 4.1% to reach $4.2 billion in 2017, up from $3.4 billion in 2012, PwC projects. That envisions consumer revenues of $3.6 billion (compared with $3 billion last year) and advertising revenues of $645 million ($408 million in 2012).

“There is a ceiling on subscriber numbers without any change to the anti-siphoning legislation which limits live sports broadcasting,” the report states.

For the first time Foxtel has acknowledged that its repricing strategy introduced in March, when it hiked the prices of the sport package but cut the basic tier, was “broadly neutral.”

Foxtel can expect a boost to revenues when it bundles its channels with Telstra’s broadband services as well as a lowering of the churn rate.

PwC executive director Megan Brownlow notes Foxtel has long focussed on average revenue per subscriber which at $99 per month is the highest in the world.

Now she says Foxtel aims to broaden its footprint by offering a cheaper price for new subscribers via its IPTV service.

The firm projects that 27% of Australian households will use an IPTV service by 2017 but says IPTV players will face a number of challenges in establishing a viable business model in the relatively small Australian market and having to compete with Apple, Google’s YouTube and Facebook.

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1 Comment

  1. There are a million pensioners out there who would use pay t.v. if they could afford it. How about a genuine discount ?

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