Question 1

Is the growth in streaming services like Kayo enough to offset losses in traditional TV?

Accepted Answer

No. While Kayo saw 27% subscriber growth in FY20, these gains are insufficient to bridge the revenue gap left by a 16% decline in total pay TV subscriptions. The transition to a streaming-led model involves moving customers from high-value legacy contracts to lower-ARPU digital products.

Question 2

How much value is left in the traditional broadcast customer base?

Accepted Answer

The broadcast segment remains the primary revenue driver with ARPU stabilizing at A$78 after years of decline. However, the commercial sector is in freefall, with subscriber numbers collapsing 67% year-on-year as of June 2020.

Question 3

What operational changes are being made to handle the revenue decline?

Accepted Answer

Management has already implemented aggressive cost-cutting, reducing the total workforce by 17% in FY20. A more fundamental restructuring is now inevitable, involving further staff cuts and a rationalization of the current channel line-up.

Question 4

How has the pandemic specifically impacted the sports streaming business?

Accepted Answer

COVID-19 disrupted the growth trajectory of Kayo, though the service still managed a 27% increase in subscribers over the full year. Recovery is expected, but the business must now navigate a more competitive SVOD landscape with a significantly leaner operational structure.

Foxtel SVOD growth can’t prevent major restructure

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