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INTERVIEW | Foxtel CEO Patrick Delany on why new WarnerMedia deal was one of toughest and most important of his career

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The new deal includes latest episodes of popular HBO dramas including Succession

Foxtel has today announced a landmark new deal with WarnerMedia in a move that significantly consolidates the future of the pay-tv business, while providing the premium content required to launch new streaming products.

The new multi-year licencing agreement covers programming from Warner Bros, HBO, and the soon to launch HBO Max and includes an expansion of exclusive Australian streaming rights.

While Foxtel is not commenting on the length of the new deal, industry sources have suggested Foxtel’s existing arrangement with HBO which had two years left to run has now been extended to five years.

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The deal comes at a time when Foxtel is under intense pressure from new competitors in the streaming sector, so for CEO Patrick Delany, a veteran of the pay-tv industry, this is one of the most important deals he has had to negotiate.

“It’s an important one. It’s confirmation of our pre-existing relationship, We’ve had a 25-year relationship with Warner Bros, we are Australia’s biggest distributor of film, both for pay-per-view, first window Pay TV, as well as library content, plus we’ve been the home of HBO.”

“But this deal takes it to another level because it is a multi-year output arrangement for all the material that Warner Bros produces for their various brands.”

“So that’ll be for new material, as well as library content. It’s important to us because our subscribers love this material. It’s of high quality, whether its Game of Thrones and Big Little Lies from HBO, or the familiar, shows like Friends and Big Bang Theory come to the Foxtel platform, not just in a linear format but also for video-on-demand.”

Patrick Delany
Foxtel CEO – Patrick Delany

The new deal comes as Foxtel prepares to launch a new drama/entertainment focused streaming service Binge next month. While yet to be officially confirmed, it’s expected the new standalone product will feature content from Foxtel’s partners including FX, BBC, NBCUniversal and Discovery. Preparation for the launch has seen Foxtel renegotiate supply arrangements with these studio’s to expand Pay-TV rights into SVOD rights.

“In order to be able to do a Kayo or the service you’re talking about, you’ve got to line all the content up and make sure you’ve got the right partners and the right content, we’ve been doing that for the last 18 months.”

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The successful negotiation of the new WarnerMedia deal ensures Binge will be a worthy competitor against the likes of Netflix and Amazon by providing subscribers access to a vast library of Warner content including premium drama from HBO, and more titles from the soon to launch, HBO Max.

“We’re excited about the direction of HBO Max, which is the youngest service Warner Bros is starting in America. We will receive all the Warner Bros produced and distributed material for HBO Max. It will skew a bit younger which is good not only for the iQ3 and iQ4 platform under the Foxtel brand, but also for any aspirations we might have to do a separate streaming service.”

Some of the titles Foxtel has secured from HBO Max include a reboot of Gossip Girl, The Flight Attendant featuring Big Bang Theory star Kaley Cuoco and Ridley Scott’s upcoming sci-fi series Raised by Wolves.

“The thing that makes all of this a little easier is that we’ve got the platform to be able to monetise the rights. In sports we’ve got Foxtel, which is a premium platform that charges a premium price, and now we’ve got Kayo which aims at a different market of either ‘Foxtel rejectors’ or people who have an affordability problem.”

“I think this is the last brick in the wall of all of the deals that we’ve done, we’ve got the freedom to now extend our streaming aspirations into the areas of drama and movies.”

Movies are an essential component of the new output deal,

“We’ve always been a very big client for Warner Bros, both with pay-per-view movies and what we call the T1s. We’ll take more library movie content in this new deal. I think libraries are very popular with our customers, especially the evergreen hit movies.

“We’re also taking more of the broadcast product from Warner Bros. Things like the DC Universe have been very, very popular for us at Foxtel and it powers up channels like Fox8 and Fox One. But also shows like The Mentalist, Friends, Big Bang Theory, I mean they’re just so famous for so many shows and all of those we can use very, very well.”

One interesting aspect of the new deal is the commitment between the two companies to co-produce new Australian original programming together,

“We produce quite a bit of Australian content, whether it’s drama or non-scripted, and we are going to do a good amount of that now with Warner Bros.” “I think Warner Bros will bring all of their international experience and international distribution as well to bear on that. I think it’s a great part of the deal.”

The Warner deal is not the only licencing agreement signed this week. On Monday, Foxtel announced a renewed content deal that would see the production of all music programming outsource to ViacomCBS. It’s a deal that will see heritage pay-tv channels including Channel [V] and Max replaced by new music channels with MTV and Nick branding.

“Yeah, it was a very tough decision. Like for me personally, I was the Chief Executive of XYZ Entertainment during the absolute pinnacle of Channel [V], when it was the hot new thing for Australian youth.”

“But you know, that’s over 20 years ago and the tastes of Australian music have changed. The popularity of music channels has changed significantly. It’s still popular for probably more people of my vintage, the over 50s. So it seemed emotionally difficult, but rationally it’s better to go with a partner that can produce programming at a lower cost, good quality material that’s going to serve our customers better, so that was the thinking and the motivation behind that arrangement.”

Faced with stiff competition from the likes of the Nine owned Stan, Delany freely admits this new contract extension with HBO was one of the toughest and most important he has faced during his impressive career.

“I was thinking about that the other day. Some of the initial deals in 1995 that we did to win channels like Nickelodeon for example, or to win over sports content, they were make or break at the time. If you didn’t get them done then there wasn’t any content in those early days of Pay TV.”

“Some of the AFL and NRL negotiations have been pretty huge. Some of our negotiations over the last 18 months in realigning what were channel partnerships and now have become quite large output arrangements, they’ve been tough too.”

“But this one, this one was a challenge, but Warner Bros are a very professional organisation and we just had to work our way through it.”

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Kevin Perry
Kevin Perryhttps://tvblackbox.com.au/author-kevin-perry/
Senior Editor and Co-Owner of the TV Blackbox website, Kevin Perry is an experienced media commentator focused on TV Production, Consumer Tech, SVOD & Sports Broadcasting. Media enquiries please Call or Text 0428-275-111
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