As Foxtel waits patiently to see if it’s going to find a new home, B&T spoke with Mark Frain, CEO of Foxtel Media, who outlined the company’s strategic shift towards digital advertising, highlighting the impressive growth trajectory that Foxtel has achieved over the past few years.
News Corp’s annual report revealed that while Foxtel saw a rise in streaming subscribers to Kayo and Binge, revenue and earnings were weaker.
“Fiscal 2024 full-year revenues declined $25 million, or 1 per cent, compared with the prior year, due to a $52 million, or 2 per cent, negative impact from foreign currency fluctuations. Adjusted revenues increased 1 per cent compared to the prior year. Higher streaming revenues, primarily from Kayo and BINGE, and higher advertising revenues more than offset the revenue declines from lower residential broadcast subscribers.
“Foxtel Group streaming subscription revenues represented approximately 30 per cent of total circulation and subscription revenues in the fiscal year compared to 27 per cent in the prior year. Segment EBITDA for fiscal 2024 decreased $37 million, or 11 per cent, compared to the prior year, primarily due to $51 million of costs related to the launch of Hubbl, higher sports programming costs due to contractual increases, and the $9 million, or 3 per cent, negative impact from foreign currency fluctuations, partly offset by the revenue drivers discussed above and declines in other costs including lower technology, entertainment programming rights, and marketing,” News Corp said in its earnings statement.
And while Frain would not be drawn on the sale of the business, the conversation revealed a company not only adapting to changes in the media landscape but positioning itself as a leader in the digital space.
Reflecting on the company’s progress, Frain noted, “Every overnight success takes a few years to get to this point. As Foxtel Media on the advertising side, we set a course three years ago with the objective of generating more revenue from digital advertising than linear TV by FY25. We’re bang on track for that, if not ahead of it.”
This shift is evident in the numbers. Three years ago, less than 10 per cent of Foxtel’s revenue came from digital sources—a figure that lagged behind its competitors in the Australian market. Fast forward to the end of this financial year, and nearly 40 per cent of Foxtel’s revenue is now derived from digital, with digital ad revenue growing by more than $50 million year on year. “We’ve got great momentum with what we’re doing,” Frain said, underscoring the company’s confidence in its digital strategy.
A significant part of Foxtel’s digital push has been its investment in streaming platforms like Kayo and Binge. According to Frain, these platforms have seen substantial growth, with Kayo alone increasing its streaming impressions by 100 per cent over the past year. This growth has been crucial as advertisers shift their focus towards digital video, particularly in sports, where live events remain one of the last bastions of appointment viewing.
Foxtel’s decision to partner with Kantar to better measure and integrate streaming data also represents a forward-thinking approach to data and measurement. “What we’ve done with Kantar is make sure our sports audiences are accurately captured,” Frain explained. “This decision has been overtaken by a much bigger commercial opportunity, which takes us closer to return on investment than we’ve ever been.”
Looking ahead, Frain expressed optimism about the company’s trajectory. “There’s a level of confidence that what we’re doing is working,” he said. “As we move into FY25, we’ll be bolstering resources and data capability to ensure we continue to grow and provide value to our advertisers.”
In an industry where digital transformation is often met with resistance, Foxtel Media is not just adapting but leading the charge. With a solid strategy and clear focus, Frain and his team are positioning Foxtel as a dominant force in Australia’s digital advertising landscape. It just remains to be seen who the ultimate beneficiary will be.
