There have been some developments in the USA in the past week that might affect Foxtel here in Australia. And Stan to some extent too.
The first big bit of news was the announcement that US telco AT&T is looking to spin off its WarnerMedia division into a separate $160 billion AUD company. As part of deal WarnerMedia would also be merged with the Discovery Networks to form a new mega-media conglomerate.
WarnerMedia’s properties include:
- HBO Max (WarnerMedia’s Netflix style streaming service)
- Warner Bros. (They own the rights to Harry Potter along with a huge amount of other movie franchises and movies)
- The CW (50% with ViacomCBS)
- Cartoon Network
- Adult Swim
- DC Entertainment (Home to Batman, Superman & Wonder Woman)
While Discovery’s properties currently include:
- Discovery+ (Discovery’s Netflix style streaming service for all of their content)
- Discovery Channel
- Animal Planet
- Food Network
- ID (Investigation Discovery)
- Trvl Channel
- Cooking Channel
- The Dodo
Foxtel currently has a long term content output deal with WarnerMedia signed in the middle of last year. So it should be said that they remain safe for a while yet. And as we’ve seen this week the state of play can change considerably in an instant.
But when that deal expires it’s looking increasingly likely that the new WarnerMedia-Discovery conglomerate will opt to not renew.
The reasons for this is by that time WarnerMedia-Discovery will likely have a combined HBO Max-Discovery+ streaming service or bundle that they will be looking to get into as many homes as possible worldwide.
This is bad for Foxtel in a lot of ways. Foxtel have built their new Foxtel Plus base package with Fox Showcase the centrepiece as they often tout it as the “home of HBO”.
In their quest to become more like Netflix all iQ3 and iQ4 set top boxes are now equipped with On Demand features. And judging by Foxtel’s own stated happiness with The Undoing and Mare of Eastown (both HBO shows) ratings and on demand numbers I think it would devastate them to lose HBO and HBO Max content.
Foxtel are also looking at disruption as Discovery comes to the end of their content rights output deal with Foxtel. I do not know when that is. But if the new WarnerMedia-Discovery looks to release the HBO Max-Discovery+ streaming service/bundle into Australia it’s not going to be good for Discovery’s channel’s on Foxtel.
There will either be a renegotiated deal in light of these changes or Discovery’s suite of channels will disappear from Foxtel much like Disney’s channels did when Disney+ arrived into Australia in late 2019.
The other big piece of media news last week was the revelation Amazon Prime Video is seeking to acquire MGM Studios.
MGM Studios franchise library include:
- James Bond
- The Handmaid’s Tale
- Legally Blonde
- The Pink Panther
- The Silence of the Lambs
The potential of an Amazon takeover of MGM comes at a time when Foxtel and Stan are bidding to secure an important new content output deal with MGM.
I don’t know if that goes through now if Amazon acquires MGM. It also doesn’t look good for Foxtel’s Movies HD channel package as there will be less possible variety of movies for Foxtel to access in the market now to offer its customers.
Amazon and their Amazon Prime Video streaming service will be strengthened having the thousands of movies and assortment of TV shows in the MGM vault available to their customers.
Unrelated to Foxtel but interesting still if the deal goes through is the release of the latest entry in the James Bond series of movies, No Time To Die. It was originally slated for release in March 2020 but has been delayed to November of this year due to the pandemic. If Amazon gains control of MGM will they release it directly to consumers on Amazon Prime Video?
Foxtel and Stan will have no choice but to double down on sports and original content (like drama, comedy, documentaries and lifestyle) with the extra money available in their content budgets in my eyes.
That means more Foxtel original shows like Wentworth and Upright and investment in AFL, NRL & cricket and any other sports they can get their hands on for Foxtel. More Stan original shows like Romper Stomper and Bloom and bidding on more sports rights when they come up for Stan. Things could get very interesting for sports viewers in Australia in the next few years. And there could be a renaissance in Australian produced drama and comedy.
So what are your thoughts? Would you subscribe to the new HBO Max-Discovery+ if it came to Australia? Are these changes likely to make you stay with Foxtel and/or Stan or cancel your subscription? Will you subscribe to Amazon Prime Video if they gain the MGM library of films and TV shows? Do you hope No Time to Die comes out in cinemas or Amazon Prime Video?