Is it time to get rid of Foxtel?

Foxtel has had a rough time of it over the last few years. With streaming services like Netflix and Stan stealing the limelight by offering hit movies and TV shows on demand for a fraction of the cost of a Foxtel subscription, the formerly dominant pay TV provider has had to shift gears in order to stay relevant.

The company is abandoning the cable network it has relied upon for over two decades in favour of going wireless, with Foxtel stating it will discontinue the HFC (cable) infrastructure and replace it with satellite infrastructure.

Aside from the competition from streaming services, the motivation for this move stems from the rollout of the NBN, as the cable network Foxtel uses (currently owned by Telstra) is being handed off to NBN Co.

Foxtel has confirmed plans to turn off its cable services and move subscribers to satellite connections, claiming the shift will provide a more reliable service for customers wanting high definition programs.

For many strata schemes, Foxtel wants to charge the body corporates for its decision to move to satellite dishes and replace cable infrastructure.

Which begs the question; in the age of streaming, is Foxtel really worth it?

Why Is Foxtel Dying?

At its peak, Foxtel had about 30-35% of Australians using its services. Best indications are it currently stands just below 25%.

The company has basically stopped investing in the dying pay-TV business and is concentrating its investment on new ways of delivering its content services.

Why is this?

The world is moving away from proprietary pay-TV services as new technologies are making such services obsolete. Internet-based broadband streaming services operate on an open system and there is, therefore, more competition.

This means more innovation, more choice and lower prices.

Foxtel is trying to move the service to new technologies such as streaming video on demand (SVOD). However, there is stiff competition in this market from other players such as Netflix, Disney, Amazon, Optus and Fetch.

Foxtel no longer has a monopoly and is finding it difficult to operate in a more competitive market.

The decline in traditional pay-TV (or cable TV) is not unique to Australia. Such services are also struggling in North America and Europe. With access to modern technologies, the distribution of content via broadcasted pay-TV has become inefficient and very costly.

Foxtel’s offering in the streaming market is very confusing with different services such as Foxtel Now, Kayo and different set-top boxes and pay-TV services over HFC and satellite infrastructure.

All have different prices so very few people have a good understanding of what to choose from Foxtel.

Foxtel in Strata Blocks

Foxtel are the only Pay TV service suppliers that provide their service to Strata Schemes.

Others have not provided their services to multi-dwelling complexes for a number of years and it does not appear that they will be providing their service in the near future.

In order to have Foxtel connected, permission from the body corporate will need to be obtained prior to undertaking the connection.

The type of connection to your property varies depending on whether you reside in a townhouse/villa complex or unit building.

Connection to Townhouses & Villas

Because townhouses and villas are constructed separately the Foxtel contractors are usually able to facilitate either an individual connection to each townhouse/villa or a group installation for the complex, depending on the type of connection preferred by the owners.

An individual connection is normally preferred because the cost of installation is only borne by those owners wishing to subscribe to the service.

A group connection can be arranged, whereby one dish or a number of dishes are fitted in various locations throughout the scheme whereby each owner simply connects to the common dish located nearest their property.

Here the body corporate would fund the installation of the dishes, however this would need to be approved by the body corporate at a general meeting via a Special Resolution and due to the costs involved a Special Levy may be required to fund the installation.

Connection to Units

Foxtel does not provide individual connections to owners who reside in unit complexes, as such the only connection available is via a group connection to the building.

Unfortunately, if your strata scheme contains more than 12 units or is more than 3 storeys high, Foxtel will charge your body corporate to provide the infrastructure and to facilitate their service.

This can only be approved via the body corporate via a general meeting, where a Special Resolution is required. This means that at least 75% of owners that are voting at the meeting, either in person or via proxy, must be in favour of the motion.

Again, usually due to the costs involved a Special Levy will need to be raised to fund the works. The cost of the connection will vary widely depending on the complexity of the connection to your building.

So, what does it all mean for strata residents?

With Foxtel abandoning its cable infrastructure and moving its customers to the satellite network many strata residents will have to make the decision to upgrade to satellite infrastructure or abandon the pay-tv service altogether.

Schemes that will have to make the decision include:

• Townhouse/villa complexes which currently have individual cable connections
• Buildings less than 3 storeys containing with cable connections
• All new developments (as cable connections will not be an option)

So what should your complex do?

Foxtel is not going to discontinue the HFC (cable) service for another three years, so there is no need for hasty decisions.

Advice to body corporates has been to not rush and start installing expensive new satellite-based infrastructure and locking them into potentially obsolete technology.

The future of broadband infrastructure is far more secure, as the telecoms industry – led by the NBN company – are spending billions of dollars upgrading its infrastructure eventually to gigabit speeds.

Foxtel is reaching a threshold where it will have to decide if it wants to continue its  pay-TV service. With declining revenues and fewer sports services, it will be interesting to see when News Corp (owner of Foxtel) will finally pull the plug.

Alternatives to Foxtel

The good news is that Australia is one of the luckiest countries on the planet when it comes to entertainment. We’ve devoured streaming services at a rate that’s surprised even jaded industry insiders, and as a result the days when premium, high-quality content could only be found on Foxtel are long behind us.

In fact, you could have a subscription to Netflix, Stan, Disney+, Amazon Prime, Apple TV and Kayo and still be paying significantly less then a full Foxtel package.

Check out the below articles which go into detail on the Best Foxtel Alternatives for Watching TV, Movies or Live Sport.

CompareTV- Foxtel Alternatives
How to quit Foxtel and replace Foxtel packages with cheaper alternatives

Author: Sam Aubrey

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