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Kayo OTT service drives Foxtel’s sports subscriber uptake

Foxtel chief executive Patrick Delany has said the Australian pay-television operator has hit record levels of sports subscribers as it recovers from the damage inflicted by the Covid-19 pandemic.

Delany said sports streaming service Kayo has grown to more than 600,000 subscribers, an increase of over 58,000 customers on figures released on August 4. A total of 331,000 subscribers were added in May alone after Australian sports fans returned to the service following the shutdown of domestic competitions.

The sports subscriber base across the group – Kayo, Foxtel and Foxtel Now – is now said to sit at just under two million, the highest mark in the 25-year history of the company.

Delany said the return of rugby league competition the NRL in May signalled the start of Foxtel’s recovery.

“We had an extraordinary moment, we had a complete rebound with Kayo,” he added, according to the Australian Financial Review newspaper.

“It’s now sitting at over 600,000 paid subscribers, which makes it one hell of a sports platform, especially when you add it together with the Foxtel premium platform.”

The Kayo Sports basic package is priced at A$25 ($18/€15.35) per month with the premium package costing A$35 per month.

Delany said Foxtel’s decision to help reduce churn by opening up access to entertainment and movie packages during lockdown, helped retain sports subscribers. He stated: “How did we cope? There was that terrible two and a half to three and a half months where we faced massive challenges.

“But with no sport, we had to cope in some way and I want to thank all of our movie partners, the studios, they immediately came to our rescue and said give movie product to our sport subscribers, which kept them engaged. That also meant that we got video on-demand moving like we had never seen before.”

It was revealed last month that Foxtel will save A$180m over the next three years in reduced fees negotiated for its sports media-rights deals. The figure was disclosed by Robert Thomson, global chief executive of parent company News Corp, during an analyst briefing on the company’s fourth-quarter results.

Foxtel is Australia’s biggest spender on sports media rights. Since Covid-19 struck, it has renegotiated deals for the country’s two most valuable properties, the Australian Football League and the National Rugby League.

Foxtel has also renegotiated its deal with Rugby Australia, terminated its deal with the Football Federation Australia, and is expected to announce a new five-year deal this week, along with commercial broadcaster Seven, for motor-racing championship Supercars.

Foxtel was struggling financially even before Covid-19. It has taken other cost-cutting steps since the start of the year, including laying off 200 staff and furloughing 140 others in April.

Delany added: “We had no choice at the Foxtel Group but to double down on transformation, which meant more people out, finding new ways of being more efficient, moving towards digital and, of course, focusing with our partners, the big partners in the NRL, AFL and Supercars, to work out how we could get their seasons back on the field.

“Five months later, I suppose winners are grinners and it feels fabulous. We have record sport subscribers. Never in the history of the Foxtel Group have we had more sports subscribers.”