Question 1

Is the new sports streaming service actually attracting a significant audience?

Accepted Answer

Kayo Sports secured 100,000 paying subscribers within its first three months of launch. This rapid adoption indicates strong market demand for a standalone sports product priced at the $25 entry point.

Question 2

Why is Foxtel moving away from its traditional broadcast model?

Accepted Answer

The legacy model is under severe pressure, with monthly ARPU dropping from $96 in 2014 to $80 in 2018. A volume-based SVOD strategy is required to offset an EBITDA that has already contracted by one-third over the last four years.

Question 3

What is the biggest threat to Foxtel’s bottom line right now?

Accepted Answer

Rising churn is a critical concern, increasing from 12.9% in 1QFY19 to 15.6% in 2QFY19. This volatility is compounded by the risk of high-value subscribers downgrading from premium packages to the cheaper $25 Kayo service.

Question 4

Can this strategy help the company grow beyond its historical limits?

Accepted Answer

Foxtel has been unable to move its household penetration rate beyond 30% for years. While Kayo targets this untapped 70%, it must do so while competing against global tech giants for premium rights and managing a US$589M EBITDA profile.

Sports SVOD – Can Foxtel deliver a KO?

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