This week executives from Warner Bros Discovery are in Australia to meet with key executives from Nine and Foxtel to discuss licensing HBO content, according to a report in the Nine newspapers. The outcomes of these meetings could have serious implications for the future of Foxtel and Stan as we know them.
Australia is not short on subscription streaming options. There are market leaders such as Netflix, Amazon Prime Video, Disney+, Foxtel/Binge/Kayo and Stan, along with smaller players like AMC+, Paramount+, Hayu, Shudder and BritBox. It’s already too many for a relatively small market to sustain.
As each of these new services launched in Australia, content supply options became more restrictive for locally-operated streamers. We may live in an era of peak TV, but if Stan and Foxtel can’t buy titles that drive subscribers, they’re going to be squeezed out of the market.
Licensing HBO titles is the one last big content deal that can be made, giving our local streamers a lifeline.
For Foxtel, which has had exclusivity over HBO programming for close to a decade, HBO has been a core pillar of its content strategy in Australia on both old-school Foxtel and its streamer Binge. As the “Home of HBO”, and by extension, the Australian home of Game of Thrones, Mare of Easttown, Succession, The White Lotus, and a large number of other buzzy must-see titles, the HBO content has been a major drawcard for upscale Aussie viewers seeking premium drama series.
And then you have Nine Entertainment Co, owner of Stan. While Stan was just ahead of Netflix to launch in the local market, in recent years it has been losing traction, falling back to fifth place behind international streaming giants. After losing its two biggest content partnerships with Paramount Global/Showtime and NBCUniversal, it is now left to make the most out of glitzy, but low-profile, shows from partners like Starz.
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The most likely scenario though is that Warner Bros Discovery opts to keep the HBO content for itself and launch its own branded streaming service in Australia.
Today, HBO Max has over 94 million subscribers across the US, Canada, Latin America, Europe and the Asia-Pacific. The company has announced a 130 million subscriber target by 2025. It is unlikely that the global expansion of the service, needed to scale up against the likes of Netflix and Disney+, is going to halt just because Foxtel or Stan make a handsome offer.
While it is true that there has been a rethink at Warner Bros Discovery about how it is valuing its content and where it is selling it, that applies more to the older library of content on offer.
There’s no indication that Warner Bros Discovery is skittish about the continued roll-out of HBO Max.
Warner Bros Discovery’s chief executive, David Zaslav, told the Hollywood Reporter earlier this month: “Our whole library went on HBO Max, and we weren’t selling any of it, but it was all on there. Now, all that could have worked, but we looked at it and we said, ‘Most of this is not being watched,’ or, ‘We don’t think anybody is subscribing because of this. We can sell it non-exclusively to somebody else. Look at this huge library that we have.’”
The only change in strategy marked by Zaslav and his team to the roll out of HBO Max is that they’re planning to rebrand the streaming service, launching it on a newly rebuilt platform – one that would be ready at roughly the same time that they would be looking to end the current licensing deal in Australia.
Without a HBO deal, Foxtel will continue on, but will likely reshape its product to reflect less of an emphasis on imported premium drama.
In September the Foxtel chief, Patrick Delaney, addressed a conference in Singapore where he told the audience: “I think the future of our aggregation is that slowly the market moves towards the aggregation of Kayo and Binge under a new aggregated brand name,” he said. “The more streaming services there are, the more strain there’ll be on wallets.”
It is that strain that is the big concern for a streamer like Stan which is looking down the barrel at increased foreign competition and a library where desirable new content is slowing to a trickle. (Stan’s chief executive, Martin Kugeler, was approached for comment for this article.)
In 2021, Stan had a 13% market share and accounted for 18% of all the minutes streamed by services in Australia. As that content supply of hot new titles dries up for Stan, you can see that just one year later Stan has dropped back to an 11% market share, with just 8% of all the minutes streamed down under.
The 2022 Deloitte Entertainment Survey found that Australian households have, on average, 3.2 subscription services. With Amazon Prime Video bundled in with cheap home delivery by its parent retail company, Netflix still seen as a must-keep service by many, and Star Wars/Marvel/children’s content seen as a major lure for Disney+ subscribers, it is becoming harder for any other streaming service to become one of the 3.2 must-haves.
Dan Barrett writes the daily Always Be Watching newsletter. He can be found talking about TV on ABC Radio, the Binge podcast Skip Intro, 4BC, SBS and more