Netflix Faces New Competition in Australia

Game of Thrones Finale Arya Hound - H 2014
Helen Sloan/HBO

Pay TV giant Foxtel and broadcaster Seven are launching Presto Entertainment as the country's fourth major streaming service

Netflix faces a new competitor when it launches in Australia in March, with Seven West Media, the parent company of top-rated broadcast network Seven, and pay TV giant Foxtel announcing Monday they have formed a joint venture for a new SVOD service.

Presto Entertainment will augment Foxtel's existing Presto movies SVOD service with TV programming from both companies.

The new streaming service is the latest Australian competitor to Netflix to stake its claim in the nascent SVOD market Down Under. Despite its relatively small population of just 25 million, Australia has one of the world's most competitive media markets.

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The new Presto service will be the home of HBO streamed shows under Foxtel's recently inked exclusive deal with the Game of Thrones broadcaster. Foxtel and Seven West Media will complement the HBO series with local and internationally acquired programming. That's likely to include Seven's own productions, such as INXS: Never Tear Us Apart and A Place to Call Home, Foxtel-commissioned dramas like The Devil's Playground and reality shows like The Real Housewives of Melbourne.

Foxtel and Seven said that specific program announcements will be made in coming weeks, as will a launch date.

Foxtel boss Richard Freudenstein and Seven West Media CEO Tim Worner said the joint venture had one aim: to beat Netflix in the local market..

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Freudenstein told The Australian newspaper: "I wonder when people see and experience the Australian Netflix service whether some of that brand halo may actually drop a bit. It will not be the same as the U.S. service."

Worner said that for Seven, SVOD "is a space that we decided we had to be in. We can't sit in the middle of the road. We have to diversify, and thankfully we've ended up with the best possible player in this space whose track record is second to no one."

Worner indicated that Seven will use its exclusive January broadcast of the Australian Open grand slam tennis to promote Presto Entertainment.

Foxtel currently operates the Presto Movies SVOD service, which it launched in March this year. Presto Movies will continue to operate as a Foxtel subsidiary, while Presto Entertainment will be a joint venture between Seven and Foxtel. Subscribers can choose to buy one service or both as a package. The joint venture is subject to approval from Australia's competition watchdog.

As well as Netflix, Presto Entertainment will compete with another homegrown service, the Nine Network, and Fairfax Media's Stan, which is set to launch in the coming weeks, and incumbent operator Quickflix. Stan has announced a number of content deals recently, including with MGM, BBC Worldwide and CBS International Studios for library product, as well as its exclusive deal with Sony for Better Call Saul and Breaking Bad.