Foxtel is struggling to deliver new customers, with their CEO blaming the launch of Freeview, new free to air TV channels and new content services, which includes the likes of Big Pond TV and Fetch TV for their problems.
Speaking at the annual ASTRA Conference Kim Williams the CEO of Foxtel said that the pay TV services was currently experiencing a churn rate of 12.7% and that the only way to attract consumers back to Foxtel was new content including exclusive content, new hardware in the form of a new IP enabled set top box and an improvement in customer service.
He said the current sign up of new customers was had been “dreary” over the past 18 months.
He made no mention of Foxtel’ s high fees which can be as high as $132 a month for some customers.
Williams said that Freeview who launched their new service in April 2010, had had an impact on Foxtel’ s ability to attract new customers, because Freeview was seen as a valuable free service by consumers.
“Freeview and over the top entrants into the market are restricting our ability despite the economy being good. We have low unemployment but events like the Queensland floods, New Zealand and The recent earthquake in Japan is having an impact on consumer confidence”.
“It’s a good news story from the perspective of existing customers,” he said. “But the paradox is that, while our existing customers enjoy and consume that which we provide more than they ever have, it has been challenging over the last eighteen months to convince new customers to take the service.
“The FTAs have used their ACMA gifted free advertising minutes to promote Freeview very heavily on prime time television. Not at all surprisingly it has had a real impact. And so it should have, given that it is the largest and most lavishly supported promotion campaign in the history of public consumer marketing in Australia” Williams said.
“This free advertising has created a lot of noise and confusion in the market place and given people a reason to be even more cautious about making a positive decision on acquiring our product”.
“However, importantly Freeview has temporarily taken our “choice” proposition with a fresh multi-channelling proposition at a great price. At the same time new “over-the-top” entrants have challenged our “depth of choice and control” message.”
He said that during the past seven weeks Foxtel had seen some slow improvement with consistent growth. Now I don’t want to get over the top about it – but there are encouraging signs that give me cause for optimism.”