Foxtel is stepping up its battle for subscribers by slashing the cost of a basic cable package by half to $25 and launching a new on-demand BoxSets channel for pay TV and digital users.
The announcement came as part of a revamp of Foxtel's cable and satellite subscription pricing in what could be seen as a preemptive move before US giant Netflix, which is rumoured to be eyeing Australia, enters the local market.
"Many Australians feel that Foxtel is too expensive to fit comfortably into their budget," says the pay TV company's boss Richard Freudenstein. Photo: Christopher Pearce
"They know that we offer fantastic content but they just don't feel they can stretch their finances to afford it," he said.
The newly created $25 per month entry point entertainment pack includes 40 channels, such as MTV, National Geographic TCM and Universal. Previously, the entry level package cost $50 per month.
The BoxSets channel will be available for an additional $10 on top of the newly announced $25 entertainment pack.
"Bingeing on television is hugely popular and we know that this service will be a smash hit," Mr Fredenstein said at a subscription TV industry conference on Thursday.
Subscribers will be able to view complete series of television shows on demand, including popular series Game of Thrones, The Newsroom, Entourage and The Sopranos.
BoxSets will be available through its mobile service Foxtel Go and through its internet-connected iQ personal video recorder boxes. At this point in time, it has not been announced for online only package Foxtel Play.
The channel is also available as part of a $20 drama pack, which also includes the Showcase, BBC First and FX channels.
Foxtel's sport package will remain $25. This means those wishing to subscribe to sport channels will pay a minimum of $50 per month, combining the entry $25 package and an additional $25 for sports.
The new pricing and content offerings will be launched November 3.
A company spokesperson confirmed that the new pricing will be available for existing customers, but they would need to request it from Foxtel and fees would not automatically be rolled over. If existing customers were to do nothing, they would receive additional content free of charge, depending on their package.
For customers who purchase their Foxtel through Telstra, which sets its own pricing, a spokesperson for the telecommunications company said it would be reviewing its Foxtel offers.
"Telstra resells Foxtel's pay TV services, so when Foxtel changes its content packaging, so does Telstra. Telstra sets its pricing independently to Foxtel and will be seeking to set very competitive pricing and ensure customers continue to receive great value from our new Foxtel from Telstra packages."
Foxtel's move comes just a few weeks after the pay TV provider halved the cost of its subcription video on demand service Presto from $19.99 to $9.99, just five months after its launch.
Cost has been one of the main reasons cited by analysts for Foxtel's struggle to improve its market penetration, which current stands at around 30 per cent of Australian households.
Mr Freudenstein said Foxtel will begin the final trialling of its triple play offer bundling television, broadband and home phone services in November, with a planned launch in the first quarter of 2015.
Foxtel had previous said 'triple play' was expected to launch late this year. Pricing is yet to be confirmed.
Due to the expected uptake in Foxtel's triple play bundle service, the pay TV provider has flagged it will be hiring more employees.
"We are in the process of recruiting over 400 new staff internally, with the bulk of the positions to be filled at Robina on the Gold Coast and the remainder chiefly in Melbourne," Mr Freudenstein said.
"Around another 350 will be required by our external installer, technical and sales suppliers and will be spread throughout the whole of Australia."