Netflix schools Foxtel: entertainment tech shake-up

Foxtel is in trouble. Depending who you ask, the pay tv giant has the huge task of reinventing the proverbial wheel or risks becoming obsolete. And with competitive alternatives such as Netflix, it’s easy to see why a traditionally complacent incumbent could fail to deliver.

Australia produces some great local content, most of which is reality tv based around the home or heart (think The Block, Masterchef and First Dates). Unfortunately this success doesn’t extend to film; the most successful being Crocodile Dundee in 1986, which grossed less than Conan The Barbarian (this was a movie?). Naturally, we look to the US to supplement our entertainment needs and until a year ago (happy first birthday Netflix Australia!), free-to-air channels and Foxtel met our collective needs. Or did they.

Since 1995, Foxtel has been the only worthy subscription tv service available to Australians. No one remembers Optus Vision et al, and for good reason. Foxtel’s monopoly of the market meant we only had one decision: who bills us – Foxtel directly or through Telstra or Optus. Despite the various luring packages and price points, Foxtel customer satisfaction was notoriously low. Like it’s parent company Telstra, Foxtel relied on consumers having no other like-for-like options. It didn’t matter that their customer service was lacking, ads were abundant and their shows were repeated more than Simpson’s episodes: the service satisfied at least 30% of Australian’s psychological need to be engaged global citizens.

2803Foxtel2729pxSource: Netflix’s halo effect takes shine off Foxtel

Jump to 2015, and amongst others, Netflix Australia finally offered a tech-savvy population an online alternative to rival the established box-based provider Foxtel.

Appealing to the digital generation, Netflix redefines entertainment technology while opening our eyes to just how dissatisfied we are with the current offering.

The convenience of accessing a digital library of tv shows and films on any internet-enabled device for a low monthly fee (from $8.99) has revolutionised the pay-tv industry worldwide. The accessibility and perceived value for money is coupled with high levels of positive customer service that collectively, have seen Netflix both lure in fresh customers and steal market share from Foxtel.

Launched at the same time as Netflix Australia, the iQ3 – Foxtel’s foray into the new world – was rushed to market to proactively address the inevitable functionality gap. Offering their existing services alongside IPTV (internet tv), the hope was to give consumers viewing choice – to stream, watch, record and share all within the one subscription, all at the same time. Unfortunately this addition to their platform was riddled with issues, over promising, under delivering and leading to the recall of over 200,000 boxes. A marketing and PR mess, Foxtel continues to look for a worthwhile streaming platform to compete with Netflix in a changing and dynamic market.

So long as your entertainment expectations do not include premium content, a recent survey by Roy Morgan Research has concluded you will be delighted with Netflix. And why wouldn’t you be? For a company that has built it’s reputation on personal experiences (Netflix offers a one month free trial), rave expert reviews and a low price barrier to entry with no contract, Netflix’s core components deliver a satisfying product. While Netflix has been kicking goals in every one of it’s 50 countries, there are those of us for whom a large range of new-release programs is worth more than the convenience or financial savings offered by streaming services. For the loyalists who still want to view the new season of Real Housewives of New York 4 hours after it airs in the US (1.35pm April 7, 2016), we have Foxtel.

 

References:

Foxtel vs Netflix – WhistleOut . 2016. Foxtel vs Netflix – WhistleOut . [ONLINE] Available at: https://www.whistleout.com.au/PayTV/Guides/Foxtel-vs-Netflix. [Accessed 23 March 2016].

How Netflix could become the Foxtel killer | The New Daily. 2016. How Netflix could become the Foxtel killer | The New Daily. [ONLINE] Available at: http://thenewdaily.com.au/money/2015/07/20/netflix-become-foxtel-killer/. [Accessed 23 March 2016].

Netflix’s halo effect takes shine off Foxtel. 2016. Netflix’s halo effect takes shine off Foxtel. [ONLINE] Available at: http://www.theage.com.au/business/media-and-marketing/netflixs-halo-effect-takes-shine-off-foxtel-20160322-gnp0jx.html. [Accessed 28 March 2016].

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