Days after Samsung announced a major deal with Foxtel to put the network on their new Smart TV’s the Pay TV operator has moved to change their channels in an effort to attract more viewers.
The move comes as the network tackles a customer churn rate which in the six months to December saw customer drop out rise to 13.4 per cent, up from 12.5 per cent a year earlier.
Foxtel who is currently facing stiff competition from IPTV operators who are looking to strip customers away from Foxtel believes that5 a change in format could help their fortunes.
According to sources recently appointed CEO Richard Freudenstein is attempting to cut new movie and TV deals with Hollywood studio’s at the expense of current content the move would see Foxtel cut out several current channels including The Movie Network.
The Australian newspaper which is owned by News Ltd a shareholder in Foxtel said that the Pay TV operator is forging ahead with plans to cancel contracts with movie suppliers Movie Network and the Premium Movie Partnership (owner of the Showtime and Showcase channels) and embark on a direct relationship with Hollywood. The Movie Network contract is due to expire at the end of this year, and the PMP agreement next year.
Also impacting Foxtel is the restrictions placed on the network by the Australian Competition & Consumer Commission who approved the merger of Foxtel and Austar subject to Foxtel accepting several important undertakings relating to content.
As part of the approval process Foxtel undertook not to seek exclusivity for movies, either in linear channels or on demand, from more than 50 per cent of the big studios or more than 50 per cent of the eight key independent distributors.
The Australian said that the condition was designed to promote competition in the nascent IPTV market, which Telstra is now able to access on a national basis through its ownership of the other 50 per cent stake in Foxtel not owned by News Limited, publisher of The Australian, and Consolidated Media. A Foxtel spokesman declined to comment.
In addition to a leaner channel mix, some channels will be refreshed as Foxtel battles to improve subscription churn.
One such channel set to receive a makeover is drama channel W, home of Law & Order and Without a Trace, which will be repositioned and perhaps be renamed as Soho said the Australian.