Foxtel Group, with streaming platforms rapidly building highly engaged audiences and driving revenue, has restructured to seek both more subscribers and advertising dollars.
CEO Patrick Delany has re-shaped the roles of senior executives, placing emphasis on streaming platforms, rather than the traditional cable business.
In a note to staff, he describes Foxtel as a proven disrupter, cementing its place in more than half of Australian homes.
The latest numbers show Foxtel’s total paid subscribers grew 6% to more than 4.5 million in the March quarter. BINGE made up more than 1.5 million subscribers and Kayo 1.3 million
"Foxtel is stable and strong," Delany says. "These are our most valuable and loyal customers. Now that we have made our back end more efficient, we have an opportunity to bring all of Foxtel together from the end-to-end customer experience through to customer service.
"Kayo Sports and BINGE are now well-established businesses that continue to grow. More than 60% of our customers are streaming and they are highly engaged. We have an opportunity to bring together critical functions to take these brands into their next era of growth and unlock new revenue streams including in digital advertising.
"We have an emerging streaming aggregation business that will change the Australian landscape forever. Now is the time to double down, just as we did with Kayo Sports, in creating a separate business division for Project Magneto (a new aggregation business coming later this year) focused on build, launch and subscriber growth."
Foxtel Media is being brought into a new Streaming Sports and Advertising Division with Julian Ogrin, chief executive of Kayo, BINGE, FLASH, leading. Mark Frain will continue to head Foxtel Media.
Delany told staff in an email that Kayo has changed the way Australians engage with sport .
"We have said many times that at its core the Foxtel Group is a sports business," he says.
"Kayo is now the front end of that business, and it will lead growth in subscription and digital advertising, led by Julian.
"The executives of Kayo Sports have an unrivalled knowledge of digital customer acquisition and retention using data and AI, and together with Foxtel Media they will lead the ongoing development of our digital advertising capabilities to monetise new audience reach.
"Importantly this effort will be for all our ad-enabled platforms including Kayo Sports, BINGE, Foxtel and Magneto (a new product to be released late this year).
"Foxtel Media remains an important brand we take to market, led by Mark. We have the best ad-tech and mar-tech capability in this country, so this now represents a brand-new opportunity for both Julian and Mark to generate the next wave of digital advertising growth for the business."
Foxtel Media CEO Mark Frain says advertising growth is one of the key pillars of the Foxtel’s future strategy for growth, and particularly digital advertising.
"I’m excited by the opportunity of bringing together Foxtel Media with the expertise of our Kayo Sports team, and ensuring we are fully embedded in and integrated with one of Australia’s leading streaming services," says Frain.
"The combination of these entities will fast track a lot of our future facing technology and data capability, to fully operationalise our inventory to even more advertisers.
"Leveraging the capability that Julian and the team have built around digital customer acquisition and retention, will provide further leverage to drive future growth and monetise our growing reach.
“We’re coming at these changes off the back of some great recent wins and momentum. We launched advertising on BINGE at the end of March, with major brands coming onboard and we’re on-track to deliver all our sold-out commitments.
"March was also our biggest digital month on record – with April then overtaking the title and May forecasted to break it again. We also had 160 new advertisers join us across the last quarter.”
Other moves:
Subscription TV, Infrastructure and Strategy Division, led by Hilary Perchard (Chief Customer, Marketing and Revenue Officer)
Delany: "Maintaining the Foxtel retail, wholesale and commercial business remains critical to customer loyalty and powering our ability to grow in streaming. Hilary and his leadership team have significantly improved customer NPS and reduced churn to among the lowest levels in our history. Going forward, this area will become the infrastructure nerve centre of our business.
"It will operate Foxtel and our wider infrastructure and operational functions, continuing to optimise cost and service levels for the business, making infrastructure decisions and keeping us as match fit as possible. It will be the heart and soul of our operations. It will also house Group Strategy and Research driving our agenda of change and future growth."
Entertainment Division, led by Amanda Laing (Chief Commercial and Content Officer)
Delany: "With BINGE reaching more than 1.5 million subscribers now is the time to create a dedicated entertainment division responsible for both BINGE and all of the entertainment strategy, acquisitions and commissioning that power BINGE and Foxtel (and Flash). We must ensure BINGE can continue to compete effectively by making content and marketing decisions that directly drive its growth.
"This area will be our home of entertainment streaming, and the content strategy, acquisitions and commissions that support our entertainment offering across BINGE, Foxtel and Magneto. This area also manages all of our third-party content partnerships, whether through channels, outputs, production houses and studios. Amanda will lead this area to ensure we can grow subscribers, leverage the content that has come from our long-term deals with leading studios and local and global production partners, and drive subscription and advertising revenue potential in the entertainment category. Amanda also remains the key lead in driving our major deals across all commercial categories with the support of Legal and Regulatory."
Streaming Aggregation Division, led by Les Wigan (Chief Technology, Operations, and Product Innovation Officer)
"This area will be key to our future in distribution. It will lead our new streaming aggregation technology business, Project Magneto, and be focused on managing the tech-heavy build and launch phase of this new product. This will be a critical part of the organisation, focused on delivering true liberation in sports and entertainment for Australian consumers. It plays an important role for the Group in reaching more homes, building more revenue streams and driving more growth for our streaming businesses. In addition to this role, Les will continue to have overall responsibility for streaming technology development and marketing/data development for the Group. Front-end development will be led by the customer-facing retail divisions."
Fox Sports Production
"I have highlighted how important sport is to our future. Our platforms to monetise our sports rights are uniquely matched by our leadership in production of live sports and entertainment at Australia’s largest sports production company – Fox Sports. It is unrivalled in Australia and around the world. Steve Crawley will continue to lead Fox Sports, reporting to me."
Sports Commercial and Acquisitions
"Rebecca McCloy, who has been instrumental in all of our sports deals and our recent major renewals including AFL, Formula 1, Cricket Australia and No Limit Boxing, will now report to me in this new operating model.
"Our Transformation Office continues to play a material role in our organisation as we move into our next era of growth. This team will be led by Sally Connell moving forward. Communications, People, Sustainability and Transformation and Finance will remain group functions reporting to me."
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