Media Moguls Pull A$15m Ad Drive for DTV Launch

13 April 2004

The heavyweight triumvirate behind the month old launch of Australian digital TV pay-channel Foxtel, has been compelled to freeze a A$15 million ($11.48m; €9.51m; £6.26m) ad campaign after the new venture was swamped by installation problems.

Backed by the pec-flexing trio of Rupert Murdoch (25%), Kerry Packer (25%) and Australia's largest telecommunications company Telstra (50%), Foxtel has run into severe problems, resulting from a triple whammy of inadequate technical support, call centre under-staffing, plus a strike of installation technicians (now resolved).

Foxtel spokesman Mark Furness played down the debacle: "We have reviewed our marketing to get a better balance between the demand we were creating and our delivery on that demand. But that is fairly standard practice."

Nor has the venture's smooth launch been enhanced by an announcement from the opposition Labor Party that taxpayer-owned Telstra should not be a shareholder in the venture -- from which the party threatens to extricate Telstra if it comes to power.

"Telstra shouldn't be in Foxtel," Labor Party spokesman Lindsay Tanner told the Ten Network. "We … find it hard to justify having a pay TV network in public ownership and we are committed to Telstra remaining in public ownership."

At present the majority of digital subscribers are existing Foxtel customers who have switched from the analog service, a mere 15% being new customers. This almost exactly replicates the situation following the launch of BSkyB, Murdoch's highly successful UK pay-TV venture -- now 100% digital with 7.2 million subscribers.

Data sourced from: Sydney Morning Herald; additional content by WARC staff