Presto shutting down: Why Foxtel is not competing directly with Stan & Netflix

Streaming video service Presto will cease to exist on January 31 2017 as Foxtel and Seven Network part ways on the joint venture opereation, leaving Foxtel to revisit and relaunch its streaming Foxtel Play service with new lower prices.

It all began with Foxtel and Seven West Media (Channel 7) announcing that Foxtel had acquired Seven West’s stake in Presto – a streaming service launched as a joint venture between the two.  This was not a catalyst, but a strategic start to a message to customers about a new re-launch of Foxtel’s own branded streaming service Foxtel Play.

Foxtel CEO Peter Tonagh said “It has been great working with the team at Seven on Presto and we look forward to future collaborations. We are delighted to be able to offer Presto subscribers access to the new look Foxtel Play, which we know will be highly attractive to them.”

Tonagh describes the new Foxtel Play as “simpler, cheaper and more flexible” and as an “evolution of Foxtel’s service”.

In reality, it’s a rationalisation and refocusing for Foxtel – focus on what they do best and get it in front of more people.

Foxtel is known as a Pay TV service, offering a huge range of TV Channels across a range of genres and formats.

The issue for the 70% of Australian homes where Foxtel isn’t subscribed is one of two things; Price or Availability.

In relaunching the Foxtel Play service Foxtel has attempted to address both issues.

On price, the entry-level is now $15 lower at $10, with a deal to get a whole bunch more channels for $25.

For those interest in the vast array of sport on Fox Sports, the entry price is now $35 (including the $10 starter price).

As always, it’s complex, depending on the channels you want.

But importantly, this is Foxtel solidifying and trying to grow their subscription TV market.  There’s already talk that the next Foxtel set-top box will provide access to streaming services like Netflix, by accepting Netflix and Stan as complimentary to Foxtel subscribers rather than competitive, Foxtel can refine the way they market the product.

Netflix and Stan offer a limited library of content.   Thousands of “hours” but at any one time a limited number of titles appealing to any individual.

Foxtel provide access to a huge range of linear (programmed and broadcast live) channels, and in any one household some will appeal to different members of the family.  Perhaps critically though, Fox Sports live channels and the range of News channels on Foxtel are a critical point of difference over the on-demand only Netflix and Stan.

Netflix and Stan beat Presto in the streaming on demand wars, no question about that.  But in the future of entertainment, everything will be streamed, and Foxtel Play is just on (large) component of that.  Fetch TV is a more likely competitor for Foxtel, not Netflix and Stan.