Pay-TV Revenue Up As Foxtel Merger Still In Pipeline

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Good news for Foxtel this morning with the news that ad revenue for the subscription TV industry are up.Industry body ASTRA, which represents Foxtel, Austar and Optus pay TV,  have said advertising revenues grew 11.1 percent to $205.8m in the second half of last year.

Total ad revenue for the year was $379.9m.

Although there was no breakdown of the figures, Foxtel, as the biggest market player would have accounted for a substantial slice of this figure.

Rumours are circulating that the digital TV giant, which is 50 per cent owned by Telstra, is about to make a $2bn bid for regional rival Austar, which if it goes ahead, would allow massive cost savings as well as an even bigger slice of ad revenue share.

However, Austar say no deal has been done but did confirm discussions are underway.

“No assurance can be given that those discussions will lead to a proposal being put to Austar or its shareholders,” it said in a statement yesterday.     

7.2 million Australians tune into pay TV and this market appears to be seen as increasingly lucrative for advertisers, growing by 14.2 per cent last year.

However, Foxtel CEO Kim Williams admitted recently fortunes had taken a dive during February due to the adverse weather in both Queensland and Victoria.

Viewers are “watching over 200 channels of genre-specific, quality programming, so it is not surprising that advertisers are seeing the opportunity,” said Petra Buchanan, CEO of Astra.

“A third of Australian homes have subscription TV, which regularly accounts for up to 60 percent of viewing in these homes.”

The Australian advertising market grew at a rate of 13.7 percent in 2010.  

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