MENU

Telstra and Fox need a triple-play to ward off competition and increase customers

The media sphere is about to get much quicker and a little more complicated as Foxtel, owned 50-50 by Twenty-first Century Fox (ASX: FOX) and Telstra (ASX: TLS), wants to stave off further competition by implementing its “triple-play” of bundling pay TV, mobile and broadband services with Telstra.

Pay TV subscriber numbers have not been expanding as desired, and this new bundling service is hoped to push household subscribership up past 30%. It also is urgently needed because US online content provider Netflix (NASDAQ: NFLX) is planning to enter the Australian market.

Netflix is said to be able to supply HD movie and sporting content at a price point much lower than what Foxtel customers are currently paying.

If a customer is only paying for one service, for example, pay TV, then it would make switching easier to do, and that is where the triple-play comes in. By combining the three, customers are less likely to change because of the mobile and internet services, thereby the services become “sticky”.

Foxtel also wants to raise more revenue from its most popular channels like Fox Sports and improve viewer numbers, by being able to bid for broadcasting rights of sports events that currently are in the realm of free-to-air TV.

Seven Network (ASX: SWM) and Network Ten (ASX: TEN), as well Nine Entertainment, are all wanting to protect their own ability to show these popular sports, saying that Foxtel is trying to make customers pay for something they are already getting free.

Telstra would also benefit greatly from the triple-play as it, too, must contend with other mobile and broadband service providers. The entertainment media industry is going through a consolidation, and it not only wants to win here domestically, but expand into foreign markets similar to Fox . Firming up its base here can be a model for those new growth regions.

Foolish Takeaway

Investors need an overall view of this industry to understand how the parts are moving. Digital media and online content are speeding up the process, and you can see how essential it is for each area- free-to-air, pay TV, and online content providers- to protect their space.

Look for those companies that have large budgets to make things really happen and have international exposure to expand in new, less-developed markets. They will have the best opportunities for growth.

Telecom giant is still growing

With its legendary, fully franked 28 cent dividend, Telstra is the darling of Aussie investors. But with its share price skyrocketing over the past year, is Telstra past its prime? Click here for our brand-new report: “Is It Time to Sell Telstra?”

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!