Presto closure costs Foxtel $21m

Folding SVOD service Presto into Foxtel’s existing subscription on-demand service has cost the Australian pay TV operator US$21 million, numbers released this week reveal.

Foxtel’s net income for the three months to September 31 fell from US$42 million last year to US$16 million, primarily due to the decision to close Presto in January 2017.

“Equity [losses] earnings of affiliates were negatively affected by A$11 million, which represents the company’s share of that loss,” the company said of its latest financial results.

In October, Foxtel, which News Corp and Telstra jointly own, decided to shutter Presto as a standalone operation after buying out the shares commercial free-to-air broadcaster Seven Network owned.

Presto subscribers are being invited to transfer to the Foxtel Play service, which is wholly owned by the pay TV firm, in December. Foxtel said it would have ongoing programming and production agreements with Seven, and has ordered to specials of long-running soap Home and Away from Seven Productions.

Presto was launched in March 2014 as a contract-free Presto Movies, with TV shows added later after Seven parent Seven West Media agreed to become an equity partner. It offers exclusive HBO programming such as Game of Thrones and other US originals, including Aquarius and Matador.

Foxtel revealed Presto had 130,000 paying subscribers at the end of September, which is well behind local SVOD market leader Netflix and others such as the Nine Network-backed Stan.

Overall, Foxtel revenues for the quarter increased US$31 million to reach US$618 million, which was mainly derived from the platform’s 2.9 million subscribers – a figure up 1% on last year.