Independent telecoms commentator Paul Budde says Foxtel’s decline in revenue and subscriber numbers has provided News Corp with the ammunition it needed to break the stranglehold that Telstra has held over Foxtel for more than 20 years.
When the service was launched in 1995, Telstra insisted on a 50pc holding, “very much afraid that News Limited would use the pay TV operation to get a foothold in the telecoms market,” Budde has recalled in a major think piece. But 20 years later, and with the service in decline he says: “Telstra is no longer afraid that the Foxtel service is going to be a threat to them.”
He adds: “With sport being the Achilles’ heel of Foxtel, it was interesting to see last year’s Optus attack on this market, poaching the English Premium League football rights away from Foxtel. And a further coup was announced last week, according to which Optus will now also have access to the Tabcorp market, where previously Foxtel had a sheer monopoly on Sky Racing screens for sporting events other than live racing.
“So the battle is over. Telstra has been able to keep News Corp successfully out of its market. This purely defensive strategy has worked and, beyond its sport segment, Foxtel has been mortally wounded … The world has moved on: Pay TV is on the way out and the future is for streaming.”
Budde’s full thinking on these and other matters can be found at paulbudde.com/blog.