Packer gives high marks to Oz pay TV biz

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PBL executive chairman and Nine Network proprietor James Packer gave a resounding endorsement to the strength and potential of Australia's pay TV sector Thursday while flagging a closer working relationship be-tween pay platform Foxtel and the Nine Network.

Packer, delivering the keynote address to the annual Australian Subscription Television and Radio Assn. conference, said that while he remained confident about "free-to-air television in general and the Nine Network in particular," PBL's pay TV interests are "wonderful assets with enormous potential." Publishing and Broadcasting Ltd. has a 25% stake in leading pay TV platform Foxtel and a 50% stake in pay sportscaster Fox Sports, while Packer's 50%-owned PBL Media group includes the Nine Network and 33% of Sky News Australia.

Free-to-air television, he said, will continue to be the most-watched medium in Australia for many years to come, but Foxtel is becoming an "increasingly powerhouse force in Australian entertainment" because of its "personalization" of entertainment services.

"Personalization of media lies at the core of future media success," Packer said.

PBL and its Foxtel partners, News Corp. and Telstra, have invested substantially in a digital TV platform, which has been positioned to deliver digital television to any digital medium that consumers want including cable, satellite, mobile or broadband.

Technology is driving "great change" in the sector, and Foxtel and Nine will partner on a variety of service innovations, Packer said, "because both companies understand the mutual benefits to be derived."

One such area in which the companies intend to be "major players" is mobile television, following the federal government's decision to auction DVB-H spectrum later this year.

"These are new business focal points for PBL and our television interests," Packer said.

In another joint initiative, Foxtel and Nine this week acquired the rights to the upcoming "Concert for Diana." Foxtel will broadcast the concert live while Nine will show a highlights package in primetime.

Alternative technologies will continue to fragment conventional TV audiences Packer said, though he expressed confidence that such emerging technologies as broadband and personal video recorders will "tend to work with TV and not against it."

On a business note, Packer is pleased that Foxtel and Fox Sports are "delivering on all its key performance indicators: profit, subscriber growth, churn and average revenue per user," citing average subscriber revenue growth over the previous 12 months of 15% and annualized subscriber growth above 10% to 1.38 million subscribers.

Packer noted that pay TV's high viewing shares in Australia are the world's best, with pay TV regularly attracting shares of 19% of all TV viewing in Australia and a 61% share of viewing in pay TV homes

Free-to-air television, he noted, however, will always deliver the biggest audiences for advertisers and will be the mainstay of local content production in news and drama.
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