👉 Background: News Corp is the company behind major publications like the Herald Sun, and The Australian. They also own a 65% stake in Foxtel with the other 35% owned by Telstra when they joined forces in 1995.

👉 What happened: News Corp has announced that Foxtel is officially up for sale, claiming it has received third-party interest. This is after subscribers have been declining over the past 5 years mainly due to the growth of streaming services.

👉 What else: Foxtel currently has 1.5 million cable subscribers and 4.7 million including its streaming services Kayo, Binge, and Flash. But with its cable subscriber numbers declining, getting Foxtel back to peak-profitability might be just too hard for News Corp.

What's the key learning?

💡The shift to digital content might be easy for viewers, but it’s very hard on the margins of old-school players.

💡Foxtel generates an average revenue of $90 per month from its set-top box subscribers. In comparison, its streaming services are less than a quarter of the price - so they typically have leaner profit margins compared to traditional pay TV.

💡Kayo, Binge and Foxtel Now make up 66% of Foxtel’s customer base but just 23% of its revenue. So Foxtel has struggled to maintain its pay-TV business, and clearly, its owners want to handball this problem off by putting it up for sale.