U.S. majors mull Foxtel buy amid feevee shake-up
SYDNEY — Already reeling from court rulings demanding open access on cable systems, Australia’s fractious pay TV industry is set for another shake-up with Cable & Wireless’ Optus for sale, UnitedGlobalCom’s Austar expanding and a News Corp.-managed Foxtel facing possible changes of ownership.
According to reports in Australia’s Financial Review, Paramount, Sony, Fox and Universal are considering the purchase of nonvoting equity stakes in Foxtel. Oz’s leading feevee platform is currently half-owned by public telco Telstra; Kerry Packer and Rupert Murdoch each hold 25% stakes.
The studio foursome already own the Premium Movie Partnership’s Showtime and Encore channels, while U, Par and Sony also own entertainment service TV1.
Reports say the studios are studying the accounts of Foxtel. With 675,000 subscribers, the feevee platform is conservatively valued at more than A$2 billion ($1 billion), and it’s preparing to bow several channels before Christmas.
The potential entry of the studios raises more questions about the increasingly frosty relations between the three main shareholders, who for months have been unable to agree on an interactive strategy for Foxtel.
Murdoch and Packer have previously threatened to walk away from Foxtel altogether over the issue.
That’s because with industrywide Oz feevee accumulated losses exceeding $2.3 billion (not to mention the costs of going digital), and programming fees rising with increasing subscriber levels, it’s unlikely that anyone’s going to make money from feevee alone — e-commerce is required.