Netflix has finally entered the Australian market now and Foxtel’s only reaction was to ensure that their price war team was enabled. But even at $25 per month Foxtel was unprepared for the update take Netflix would attain.
The market was ready to be broken for a while and this disruption has been long awaited by the public in Australia. Netflix’ price point is unmatched at the lowest package starting at $8.99 per month.
Even the free to air market is under threat as Netflix will hamper corporate advertising spend in the free to air space as marketers will look for alternatives.
Opportunities for investors are in the option of TPG and Optus who are gearing to provide promotional products to pounce on the Netflix fan base such as free netflix subscriptions. Possible opportunities will also be with Vodafone as they gear up to provide bandwidth packages for Netflix clients.
We are yet to see the impact on Australian TV and Movie productions as Netflix reduces the demand of Free to Air TV and the traditional TV viewing habits.
Foxtel has truly missed the boat to change its business model to compete with Netflix and we should be able to see shorting opportunity at best here in the CFD market. We had hoped for more from Foxtel as published in December.
We are shorting all stocks associated with Foxtel and going long on Optus, Vodafone in our portfolio currently.