Australian Streaming Wars: Presto to Shutter, Quickflix Sold

Courtesy of John P. Johnson/HBO
Foxtel and its Foxtel Play service get exclusive access to HBO series like 'Westworld'

Netflix retains its supremacy down under as local players falter.

The 20-month-old Australian subscription video-on-demand (SVOD) market experienced a major shake-up Tuesday as Presto, jointly owned by pay TV giant Foxtel and TV company Seven West Media, said it would close in January, and Quickflix received a lifeline via a sale to a U.S. investor.

Observers cited the success of Netflix as one key driver behind the developments.

Karma Media said it would acquire the SVOD and DVD mail-order business, which went into voluntary administration in May, for $1 million (AUS$1.3 million).

Ahead of the announcement of the Presto closure, Foxtel, a joint venture between News Corp and telecom giant Telstra, said it would acquire Seven West’s 50 percent stake in Presto for an undisclosed sum.

The closure of Presto, which has an estimated 132,000 subscribers, will allow Foxtel to more aggressively chase streaming subscribers with its existing Foxtel Play service. Foxtel said it would slash the pricing for its Play packages in December in a bid to counter the inroads made by Netflix into the Australian market since its launch 18 months ago. Netflix is estimated to have around 1.8 million subscribers.

Foxtel Play, rather than being a one-stop shop for movies and TV dramas, offers tiered packages similar to Foxtel’s main pay TV service, including sports.

Foxtel CEO Peter Tonagh said: “Foxtel Play will be a simpler, cheaper and more flexible IP-delivered product, which will create much better value for Australian consumers. It is the logical step for us to take in the evolution of Foxtel’s service. The new offering will mirror the successful launch of HBO Now in the U.S. and Now TV by Sky in the U.K."

Foxtel last month announced it had signed a new long-term agreement with HBO, under which it can air five times more hours of HBO content, including allowing Foxtel Play subscribers to access the whole HBO library on demand.

Karma, meanwhile, will take on Quickflix with 24 employees retained, according to local reports. Tech and media entrepreneur Erik Pence will lead the company as its new managing director, with Karma investing $700,000. Deloitte and Richard Hughes, which handled the company during voluntary administration, said Karma’s proposal was “a good outcome for stakeholders."

The moves leave Netflix and Stan, a local streaming service jointly owned by Nine Entertainment and Fairfax Media, which reportedly has 320,000 subscribers, as the two major standalone SVOD players in the Australian market.

In Canada, cable giants Shaw Communications and Rogers Media also announced recently that they were shutting down SVOD service Shomi.