The big winner out of today’s Foxtel-Austar merger is Fetch TV, who has quietly lobbied the Australian Competition and Consumer Commission ever since the $2 Billion dollar proposed merger was first announced.
According to Scott Lorson, the CEO of Fetch TV, which supplies digital set top boxes and content to several ISPs including Optus and iiNet, the conditions associated with the approval of the deal allows Fetch TV to bid for content from the likes of Disney, BBC, the Movie Channel, Turner, Nickelodeon and several other major Hollywood Studios that is currently subject to exclusive content deals.
“Today is all about Linear channel TV. Fetch TV is a logical number two to Foxtel, We are the counterweight to Foxtel and what the ACCC has delivered is a sensible outcome for the industry. It presents Fetch TV with several opportunities to access content when exclusive licenses come to an end with Foxtel” Lorson said.
“There are still several other issues but today was all about content and the opportunities ahead. Foxtel has 26% of the Australian market and they will always hold onto that. We now believe that we are in a position to extend our Linear reach and offering in the Australian market and that is what we are now working on”.
The Australian Competition and Consumer Commission’s (ACCC’s) approval, which was subject to restrictions on future acquisitions by Foxtel, was the final hurdle to be cleared before the takeover could proceed.
ACCC chairman Rod Sims said the commission wanted to ensure there was competition in the national subscription television market – particularly in the developing internet protocol television (IPTV) market – and in the fixed-broadband and fixed-phone markets in regional areas.
Foxtel also will be banned from holding the exclusive rights to movies offered as part of video-on-demand and mobile services.
“By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets,” Mr Sims said in a statement.
“Taking into account the undertaking which has been offered by Foxtel, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition.”
Foxtel said its undertakings covered five areas:
Non-exclusivity over a broad range of channels
Foxtel will not acquire exclusive distribution rights to more than 60 channels, including Disney Channel, Sky News, ESPN and Kids Co, and associated video on demand content unless another bidder seeks exclusivity. This gives IPTV players access to channels and allows them to bundle channels with phone and broadband.
Non-exclusivity over video on demand movie rights
Foxtel will not exclusively acquire video on demand rights to movies, unless another bidder seeks exclusivity.
Non-exclusivity over movies supplied by major studios and key independents
Foxtel will not to seek exclusivity for movies, either in linear channels or on demand, from more than 50 per cent of the major studios or more than 50 per cent of the eight key independent distributors. This inclusdes for subscription video-on-demand services, except for new release movies on its channels, which it can purchase as exclusives for 18 months.
Signal access to facilitate IPTV delivery by third parties
For a fee, Foxtel will provide channels to IPTV players via an internet exchange or satellite signal. IPTV players will be able to efficiently receive the signal for channels they have negotiated agreements with.
*Special Access Undertaking extended to Austar set top units
Foxtel will extend its Special Access Undertaking (a deal it made with the ACCC in 2007) to Austar set top units. Independent channels will keep access Foxtel and Austar’s 2.2 million subscribing households so they can sell their channels directly to those customers.