What you need to know:

• Foxtel held its upfront in Sydney, confirming an ad tier for streaming platform Binge (as reported last month), 4.53m subscribers across its assets and ambitions to reaggregate different apps into one central platform.
• Foxtel Group CEO Patrick Delaney said every second home in Australia had one of its products, as the network "chases down" 5m subscribers while pursuing a one-stop shop for streaming next year, including billing, via its mooted Glass uber platform. 
• Early in the new year, Binge will take on Netflix and Disney+ with four minutes of ads per hour, frequency capped at one ad per user per hour.
• Westpac CMO Annabel Fribence said marketing has become infinitely more complex in recent years and, nodding to recent marketing science stoushes around reach, attention and brand-demand investment levels, said “none of us know the answer”. Testing and learning is crucial, per Fribence.
• Foxtel confirmed a $23m capex investment in adtech, and said it will cut carbon emissions by 60 per cent by 2030 – with other local networks so far mute on firm commitments.

Ads on Binge, more than 4.5 million subscribers, a better ad experience and impending access to transaction, location and intent data from across News Corp were the key selling points to lure advertisers unveiled by Foxtel at its 2023 upfront at the Alliance Arena via a slick, confident presentation.

In early 2023, the network’s Binge streaming video on-demand (SVOD) platform will join sports streamer Kayo in running advertising – four minutes per hour, pre- and mid-roll, a frequency cap of one per user per hour, and no advertising to children – adding an additional dimension to its current 1.3 million subscribers. It is the same ad load Netflix will run in its soon-to-launch ads business, and confirmed a report in Mi3 last month. Crucially, per Foxtel Media boss Mark Frain, it will launch with "scaled audiences" from the get-go, which he suggested rival streamers cannot match. Sources have suggested 400,000-500,000 is the initial target, though it's not yet clear whether this will be additional to that 1.3m subscriber base or partially cannibalise.

Foxtel wheeled out or cut-to the likes of Pat Cummins, Sam Neill, Tim Minchin and Brian Cox at the Allianz Stadium in well-oiled presentation that underlined its live production capabilities. Senior execs touted major audience and revenue gains, particularly across its digital channels, positioning Foxtel as a far cry from its perception five years ago as "a national extension to a metro buy" to become the main game in town, per a typically bullish Foxtel Media boss Mark Frain.

Frain said Foxtel now made 30 per cent of revenue from digital and commanded 53 per cent of commercial BVOD minutes from April to June this year. “That demand has seen us grow 120 per cent compared to the broader BVOD market’s growth of only 53 (per cent),” he claimed, unpacking the network's new mantra of "watchability, connectivity and usability”.

“Many of today's players are good at some of this, but not all of it,” said Frain. “Some have connectivity at scale, but no watchability. Some have usability, but not enough scale with audiences that grow your brand. The fact is, if you don't have the multiplied power of all three working together, you're playing the wrong game.”

Group boss Patrick Delaney claimed Foxtel now has presence "in every second home in Australia" and said the group is “chasing down 5m subscribers" across Foxtel, Kayo, Binge, Flash, and Fox Sports. He flagged plans to reverse the industry’s increasing fragmentation via uber platform, Glass, predicted to be in market late next year.

“We believe the next era will be different to the last five years of disaggregation. The next shift will be about re-aggregation, and it'll be about true convergence… I'm not talking about a smart TV with a bunch of apps. I'm talking about real convergence. One provider that makes everything easy. One bill, one referral engine, one interface. The Foxtel Group is going to change the game again through new partnerships, new technology, and a converged experience like nothing you have seen before.”

Competitive advantage

Over the past year, advertisers have called out the major television networks for a poor experience on BVOD. Uber’s Lucinda Barlow led the charge at the Future of TV event earlier this year. She was in the audience.

Foxtel Media’s Daniella Serhan addressed the issue directly. “Poor ad practices tied to old moneymaking models have rendered some TV unwatchable,” Serhan said, adding: “Lucinda.”

She continued: “A common output on other BVOD services is overstuffed ad breaks and often with the same brand. That means too many of your ads are lost in ad structures that deliver no impact, or worse still, a negative impact for your brand. For example, this show has now been going for about 45 minutes. And if other BVOD platforms were screening this upfront, you'd have seen an average of about eleven minutes of advertising, about 28 spots, and at a bunch of multiples… At times, it's not great to watch, but we respect that they have a different model.”

Serhan also had a jab at the new social platforms like TikTok, which have claimed to reduce TV viewing by a third among its user base since it arrived. Gen Z, she said, would “reject a poor ad experience in the middle of their latest dance challenge”. Ads, even from their creators, might “tick off more than just a few users, just as a lack of brand safety and transparency might tick off more than a few advertisers”.

Hard numbers: Emissions down, adtech capex up

Foxtel put some hard numbers on the table on the sustainability and carbon emissions front, while acknowledging it is a hard slog. It has reduced scope one and two emissions – those directly controlled by the company – by 33 per cent over the past two years, per Toby Dewar, Foxtel Media’s Director of Customer Engagement. “Over the last twelve months, we've committed a million dollars in airtime value to support environmental causes and we're on track to reduce our carbon emissions by 60 per cent by 2030,” he added. No other major broadcaster has yet made public emissions commitments to that level.

The network also said it had approved “the single most significant” piece of capital expenditure in its history, with $23m set aside for advertising technology (as reported last month). It also flagged a deal with News Corp’s NewsConnect, a data set of 16 million Australians based on News Corp’s assets (as reported here). Foxtel said it would initially offer access to Kayo built on transaction, location and intent data from data partners like Experian, Flybuys and Mastercard.

It also increased its FoxTest ad experiment investment from $3m to $5m but noted it would be spread across fewer clients this year.

Westpac CMO: There is no single source of truth

One user of FoxTest, Westpac’s Chief Brand and Marketing Officer Annabel Fribence, was interviewed before the crowd. Perhaps alluding to the recent marketing science stoush triggered by Prof. Byron Sharp's recent broadside, she acknowledged the complexity of the marketing landscape. Nobody has all the answers, suggested Fribence.

“I've been marketing for 20 years and I think when I started, the media landscape was kind of like a 20-foot problem and now it's like a 17,000ft, three dimensional beast that keeps on getting bigger. You've got endless channels, formats, segments, data and measurements,” she said.

“We've got to know how to use this complex ecosystem to drive commercial incrementality, get the measurement, send it back to CFO… As marketers, we've got increasing knowledge coming in in terms of how brands grow, behavioural science, how consumers make decisions. And I guess the key thing is that none of us actually know the answer. Suppliers who have the bravery to lean into that and have that growth mindset and really want to hold hands and figure out how do we continually improve and increase our effectiveness and efficiency is something that we love and value.”

Market response: Most confident Foxtel so far, business impacts required

Media buyers said Foxtel was on form. But some suggested there is room for improvement when it comes to demonstrating business results for brands.

“It was certainly the most confident we’ve seen Foxtel. Few media owners could secure the AFL rights and then focus on the broader content slate,” Omnicom Media Group’s Chief Investment Officer Kristiaan Kroon said. “The 2022 upfronts will be remembered for the arrival of SVOD advertising. Binge will bring immediate local scale and sophisticated ad solutions.”

Seb Rennie, GroupM’s Chief Investment Officer, said the upfront execution had raised the bar, while the Binge announcement had "lit a fire" under the competition for streaming advertising dollars.

“All eyes turn to scale, user experience and measurement. It is a very exciting time for the Australian video market,” he said.

“Foxtel touted their financial stability and scale in a very assured presentation which had most claims backed up with proof points demonstrating revenues are up for the first time in five years.”

Buyers were universally impressed, though one exec noted the presentation lacked hard brand results. “It was slick, they had the Binge announcement and indicated they will have a bigger audience from the get-go. They had a magic formula: watchability, connectivity and usability. But they missed one really important bit – what’s the client outcome? It was very upper funnel, all about people seeing their stuff, but what do they do with it? How does it actually get an outcome for a client?” 

Initiative Sydney’s Investment Director Daniela Rocchi said Foxtel was heading off new competitive threats.

“There was a dig towards Netflix,” she said. “They can target, Netflix can’t.” Brands will follow the streamers, she said, which will have a flow on effect and pull from both the TV networks and YouTube.

Ryvalmedia’s Joseph Pardillo and new Sydney chief Bianca Falloon, said the arrival of Binge ads put Foxtel in an “aggressive position” as “ominous competitor headwinds”, led by Disney+ and Netflix, are due to hit over the next few months.

“Especially when combined with Kayo to bring that ‘one-two punch’, the combined subscriber base provides genuine scale to further enrich their understanding of their viewers, which is a very compelling USP indeed,” per Pardillo.

'A bit of marketing bullshit'

The event included some celebrity cameos, including actor Sam Neill, cricketer Pat Cummins and Tim Minchin tinkling the ivories. It wrapped up with a pre-recorded video from Brian Cox, who plays Logan Roy in the show Succession, who suggested the network is also aware that, after all, it's just advertising.

“Watchability, connectivity, usability. Sounds like a bit of marketing bullshit, but Logan would still probably spend millions with them,” he said. “I’d say Foxtel Media upfronts, great, excellent, wonderful. Right, Upfronts meeting over. Now you can just fuck off."