Foxtel aims to disrupt with ‘Project Magneto’ in quest to translate users into profits

However, Delany says Magneto goes beyond what any existing service offers.

“They [consumers] are hopping from one app to the next without finding what they want, unable to track what they’re subscribed to and how much they’re spending every month. Magneto will solve all of these problems and more.”

He points to data from Accenture’s 2023 Reinvent for Growth report, which found 44 per cent of people are frustrated by having to switch between different apps for different services.

The launch of its two key streaming services, Kayo and Binge, turned Foxtel’s fortunes around over the past few years, though global headwinds show streaming growth slowing across the board.

The technology for the new dish-free, box-free televisions and plug-in pucks was developed by Sky and Comcast, with a similar product, the Sky Glass TV launched in the UK in 2021 to mixed reviews.

Sky Glass TVs retail for an upfront price of £699-£1199 ($1350-$2300) depending on size, or various monthly prices, which you can then stack subscriptions on top of.

Magneto will have a new and localised interface and operating system, Delany says, so it’s not just a straight copycat. Pricing of the TVs, plug-in hardware and subscriptions will be revealed in the coming months, though Delany says the level will be affordable.

Delany was appointed in 2018. His task to fix Foxtel was labelled the “toughest job in media” after fiscal year 2017 brought a decline in net subscribers for the first time, as cheaper streaming alternatives began to prove more attractive for customers.

Asked at the time if Foxtel could return to subscriber growth, Delany said: “I think some of those questions are a bit simplistic. The real question is, how we constitute the business going forward, to make sure that we keep the customers we currently have, and then aggressively go after ones that we don’t,” he said.

Foxtel’s total subscriber base in March 2018, shortly after the launch of Foxtel Now, sat at 2.8 million.

Since then, Foxtel’s traditional broadcast and commercial customer base, typically a much older demographic, has declined by about a million. It sat at 1.6 million in its most recent financial results.

Yet, its total paying customer base has grown to 4.5 million, aided by more accessible prices for Binge and Kayo. This total figure does not account some individuals owning several services.

The company is due to deliver its full-year earnings next week. Current trends could see both Kayo and Binge overtake Foxtel’s traditional customer base for the first time.

Change hasn’t been without its challenges though. Foxtel launched a news streaming service, Flash, in 2021 which has since been all-but abandoned by the company after it failed to gain significant traction.

Both Netflix and Disney, like Foxtel’s Binge, have introduced ad tiers to their streaming products in a push to find untapped subscribers and revenue, while Netflix has also looked to crack down on password sharing.

Disney’s March quarter results showed a loss of 4 million streaming customers, with losses in the division totalling $991 million, a figure the company said was “not as bad as expected”. CEO Bob Iger told investors the company was “pleasantly surprised that the loss of subs due to what was a substantial increase in pricing … was relatively small”.

This challenge adds a headache too for Rupert Murdoch and his family, who became Disney’s second-largest shareholders after the company acquired 21st Century Fox in 2017.

Disney is also understood to be considering opening up its extensive back catalogue of content to its competitors to recoup some value from its owned assets, which include the Marvel and Star Wars franchises, currently only accessible through Disney+.

“We’re all adjusting,” Delany says, noting Disney and Netflix are both a “long way from being confident now”, a major shift from streaming’s honeymoon era several years ago.

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A pricier product could prove difficult to convince Australians of as wallets continue to tighten, yet Delany is bullish on Foxtel’s new technology helping it exceed its target of 5 million total customers.

Crucial to this, Magneto has its local competitors on board he says, with content partnership deals with the free-to-airs and most SVOD services already in place, providing “a great platform to showcase locally based series and programming”.

Seven confirmed it has a deal in place, Nine and Ten did not comment on any details and the ABC said it does not have a deal with Foxtel agreed.

Securing the commercial networks is particularly important, with Communications Minister Michelle Rowland planning to legislate a “prominence” framework, which will ensure local broadcasters and their online video applications can easily be found on smart television devices.

It is understood Foxtel thinks this legislation won’t be an issue for Magneto products, however.

Foxtel is a “proven disruptor” in Australia, Delany says. Its heritage is in content aggregation, first launching with 20 channels in 1995, which Delany says will be taken to the next level with its new service.

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