Foxtel subscriber numbers and revenues up but marketing spend sees profits drop
Foxtel launched its IQ3 in the first quarter of the year
Foxtel’s subscriber numbers are “approximately 2.8 million” as of March 31, up 7 per cent year-on-year, News Corp’s latest quarterly earnings report has revealed.
However, the huge marketing push to support the pay-TV service’s lower price stuctures, investment in Presto and the launch of ‘triple play’ home phone and broadband deals saw the company’s EBITDA – earnings before interest, tax, depreciation and amortisation – drop by US$61m to US$163m for the quarter. In local currency the EBITDA was down 17 per cent, while revenues were up 1 per cent.
Last month Foxtel marketer Ed Smith pointed to the huge investment the company had made to market streaming service Presto, as well as the spend by rivals Stan and Netflix, as the reason for increased media agency ad spend for the first quarter of the year.
Foxtel’s Triple Play is a crippled joke. If you can’t get ADSL (in any of its varieties) you can’t get Triple Play – yet they already have a cable going into the homes of Foxtel subscribers.
The sooner they break the shackles with Telstra and their restrictions on Foxtel offering cable broadband, the sooner Foxtel will become a real broadband choice.
iQ3 = the biggest tech failure of the last decade
When your profit is down because your marketing is too expensive – you’re doing it wrong.