Foxtel Delivers Subscriber, Profit and TV Viewing Share Growth

Wednesday, February 20th, 2008 
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FOXTEL today announced continued growth in subscribers, improved profitability and a solid revenue increase for the half year to 31 December 2007.

FOXTEL’s earnings before interest, tax, depreciation, and amortisation (EBITDA) rose by 62% to $165m for the half year to 31 December 2007 from $102m in the first half of the 2007 financial year. FOXTEL in the latest half recorded a $73m profit (before tax and refinancing charges, after depreciation and interest and including joint ventures) representing a $51m improvement on the previous corresponding half.

At 31 December 2007, FOXTEL had 1,335,000 direct subscribers, an increase of 13% over the year ended December 2006. FOXTEL’s total subscriber base, including wholesale customers, grew by 12.7% to 1,492,000. In January 2008 FOXTEL passed the milestone figure of 1.5 million total subscribers – securing a 29% penetration of Australian homes within FOXTEL’s operational areas. In Sydney, the most populous market in the nation, FOXTEL is now available in the homes of 38% of all television viewers.

FOXTEL’s total revenue for the half was $805m, a 17% increase on revenue of $687m in the previous corresponding period. FOXTEL’s subscription revenue increased 17% from $591m for the half year ended 31 December 2006 to $689m for the 31 December 2007 half. The increase was driven by growth in both subscriber numbers and average revenue per user (ARPU). ARPU increased to $84 as a result of higher take-up of additional services such as the FOXTEL iQ and Multi-Room services and penetration of the highest level Platinum package. FOXTEL iQ personal digital recorder penetration is now over 20%, while Platinum continues to be above 40% take-up by the direct subscriber base.

There was a slight increase in churn over the half to 13.5% (annualised). The increase in churn on the previous year could be attributed to some economic factors such as interest rates and a large body of contract maturities where a small percentage of customers elected not to renew. FOXTEL’s churn rate remains low in comparison with most international counterparts.

FOXTEL continued to increase its share of television viewing. For the year to 31 December 2007, in subscription television homes FOXTEL recorded a 60.2% share of all TV viewing, compared with a 56.6% share across calendar 2006.

FOXTEL’s Chief Executive Officer and Managing Director, Kim Williams AM said, “FOXTEL’s story is one of consistent commitment to creativity and innovation which focuses carefully on consumers. FOXTEL continues to grow its subscriber base, its revenues and profits through the appeal of our product and service and from product innovation which enhances that appeal. The company persists in its commitment to strong financial disciplines. FOXTEL will continue to create new entertainment horizons for Australian consumers and raise their expectations of television with a variety of new product releases scheduled for 2008.

“FOXTEL’s first innovation in 2008 will see the launch of our High Definition Television service, FOXTEL HD+, in mid 2008. FOXTEL HD+ will lift the television experience for Australian consumers to another remarkable dimension”, Mr Williams said.

Further information contact: Kristen Foster, FOXTEL’s Director of Corporate Affairs

FOXTEL FACTS (2008)

At the end of January 2008, FOXTEL passed the milestone of 1.5 million total connected subscriber homes, a reach of more than 5.5 million Australian viewers.

At 31 December 2007 FOXTEL had 1,335,000 direct subscribers, 13% more than at the end of December 2006.

Over 20% of FOXTEL’s direct subscriber base has FOXTEL iQ and FOXTEL’s Platinum Package continues to be above 40%.

FOXTEL is now 100% Digital, with the migration of all subscribers to the Digital platform in January 2007 – three years after the launch of the FOXTEL Digital platform.

FOXTEL expects solid consumer demand to continue for its products as a result of the unveiling of its new HD+ service (to be launched by mid 2008).

FOXTEL’s VISION FOR 2008 AND BEYOND

On 30 January 2008, FOXTEL unveiled details of its new High Definition (HD) service – known as FOXTEL HD+ – and revealed the initial exclusive channel line-up at the launch would include some of the world’s strongest subscription television brands: BBC HD, Discovery HD, National Geographic HD, FOX SPORTS HD and ESPN HD, plus the introduction of blockbuster movies in HD and On Demand through FOXTEL Box Office.

FOXTEL’s HD+ service will be launched in mid-2008. FOXTEL is committed to expanding the HD+ service from as early as 2009 with the launch of a brand new satellite and access to increased cable capacity.

In 2008 FOXTEL will launch two new iQ’s; the first is a state of the art High Definition version, simply called iQ2, which will be our vehicle for high definition product delivery henceforth. The iQ2 will have a 320 GB disc drive expanding the recording space for consumers together with the ability to record 2 shows and watch a third show live. The iQ2 will be capable of broadband connection making it future proof. The second is an updated, improved version of the successful existing standard definition iQ.

FOXTEL AND NETWORK TEN SECURE AUSTRALIAN BROADCAST RIGHTS TO THE DELHI 2010 COMMONWEALTH GAMES

On 16 January 2008, FOXTEL and Network TEN announced they had secured the exclusive Australian broadcast rights to the 2010 Commonwealth Games in Delhi, India. Under the landmark partnership agreement TEN and FOXTEL will share all broadcast rights, allowing both TEN and FOXTEL to broadcast simultaneous live coverage of all events. Both networks will have coverage of the Opening and Closing Ceremonies, with TEN exclusively live.

The 2010 Commonwealth Games will be the first to be host-broadcast produced in full High Definition.

TEN and FOXTEL will also look to on sell the radio rights, with FOXTEL securing the exclusive subscription television and exclusive new media rights, including mobile, internet and digital video broadcast handheld (DVB-H).

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