Aug 09
15
To Kerry with Love
Every Government knows that to keep the sheep
constituency happy – you need to feed them four
hours of entertainment daily to “pay” them for the addition to the national
coffers (Tax).
The other day I found some DVD’s at a barrow stand in a
shopping centre selling for $2.00 each.
They were all “B” grade movies, but at least competition is
starting to enter the home media consumption arena.
The Koltai Household now has 127 DVD’s and 94 CD’s†. The DVD’s were purchased at varying prices
from $75.00 to as low as $5.30 with some from Aldi containing as many as three movies
per DVD and some containing only one. The aggregate price per movie equals
$25.09 and the aggregate price per music track equals $1.27 for a total “ownership”
consumption value of $5099.05 for movies and $1922.3 for music.
I have only been purchasing DVD’s since 1999, therefore that
represents a video entertainment budget of $509.90 per annum for Videos or approximately
$10 per week.
In the same period, I have rented or been party to the
rental of approximately four videos per month at an average rental price of $3.75
each. Adding another $7800 to the entertainment cost.
Foxtel (about to be disconnected) has added another 150 per
month to the current outlay – up from the $45.00 per month I was paying for the
advertisement free Galaxy back in 1997.
So another $11,700 for Foxtel Content. (Which of course I
time-shifted, via analogue – in it’s entirety…….. 5.4 TB – OK – the best
movies.)
Ignoring the cost to my leisure time of advertising on Foxtel,
and ignoring the time to go and buy the DVD’s, petrol costs, vehicle depreciation,
parking expenses ($27.50 per hour in the city), the Koltai household has spent
an average of $2652 per year over the last decade.
If I was the sole wage earner and I was on the average wage of
$44,000 than that would represent over eight percent of post tax nett earnings.
With the repeating fair on Foxtel, video purchases and
rentals are still required to ensure entertainment of the younger members of
the household who thrive on variety and not REPITITION and REPEATS interspersed
with more advertising than on the Free to Air channels.
Therefore it would appear that Foxtel and the entertainment
content industry accounts for a potential 8% of this countries domestic
consumer GDP.
Quote from the Foxtel Magazine Media kit:
Finance
• Foxtel readers have an average household income of $107,860
• 737,000 readers work full or part time employed
• 281,000 fall into the AB socio-economic quintiles
(Grab
a copy before it disappears – and get a large box of tissues – you will need
it to wipe your eyes from all the laughter……).
Well thank God for that. Obviously the riff raff of the
country – in other words the largest tax contributors can’t afford Foxtel
OK so it’s now only 4.7% of the GDP; but that’s before movie
attendance, digital downloads and the special Foxtel (delay the date/date cable
release by nine weeks so we can charge the schmucks $5.95 extra for something
they should be seeing for free now – i.e.: included in their cable TV
subscription.)
So the question remains – if the cost of entertainment for
cable TV in Australia
is out of the reach of the average Aussie family; where are they getting their
entertainment from?
(And they want to outlaw P2P whilst not providing an
economical alternative that the population can watch with interest and obtain hedonic enjoyment
from.)
Alan Ruben predicted this in his 1993 paper, Audience
Activity and Media Use wherein he
explored the view of audience behavior lying between the
extremes of a passive audience expected to be influenced by communication
messages and an active audience expected to make rational decisions about what
media content to accept and reject.
It would appear from the latest Foxtel Advertisements:
Free IQ for a year and – “Now available – one year only
contracts”
That the consumer has spoken, Aussies are now no longer
sheep and are making decisions about what media to accept and reject.
Does that mean that Foxtel’s churn rate has risen from the 13.4%
of a year ago to now a worrying 20-25%?
Not according to an article
in Business Day.
Revenue rose 11 per cent to $1.84 billion as Foxtel won
90,000 new customers, held cancellations steady and raised average spending
per subscriber with its digital recorder, iQ.
If Foxtel are giving the IQ away for a year – on one year
contracts – then how can they raise average spending per customer with the IQ ?
And what does “”held cancellations steady” mean exactly?
Is that “held cancellations steady” as they grow at a
compound rate of 1.2% per month?
To all of this, I can only say two things:
“No wonder we are having a recession.”
And
“Thank god for P2P – for without it we would have zero
affordable choice.”
To uncle Kerry – in WA – I have this to say……. Roll-out the
TiVo connected to the 3.4 Ghz spectrum that you acquired and feed personalised
programming to every Australian
That will break the back of the Foxtel monopoly AND probably
satisfy the little guy as well – as long it’s affordable.
Pssst….. $150 per month ain’t affordable for 80% of
Australian households but a dollar per movie – on demand would be.
That would be about $30.00 per month from every Australian
household.
Or – $
2,664,000,000.00 per annum. Kinda makes the Foxtel revenues look almost paltry,
really…….
Now if you were to add VOIP, PABX and digital music on
demand to the mix for a royal triple play (a la European style) you could clean up Mr. Stokes.
What the hell is wrong with your advisors?
Channel 7 with Unwired is holding the key to the Fort Knox…. and the potential mindset of every Aussie and laptop manufacturer,
importer, mobile phone manufacturer. (Replace wifi chip).
For the life of me – I am unable to understand why 7 is
playing with a hostile takeover of Foxtel – who cares?
Kerry – FOXTEL IS IRRELEVENT!
carpe
diem quam minimum credula postero
(Seize the day and place no trust in tomorrow.)
BTW (Just joking about the Love thingy…)
References:
Audience Activity and Media Use. – Rubin, Alan M.
Communication Monographs, v60 n1 p98-105 Mar 1993
Television uses and gratifications: The
interactions of viewing patterns and motivations
Alan M. Rubin
Journal of Broadcasting & Electronic Media, 1550-6878, Volume 27, Issue 1,
1983, Pages 37 – 51
Foxtel Media Kit (Page 4).
Modelling television viewing patterns – Cave, Martin
Publication: Journal of Advertising
http://www.allbusiness.com/professional-scientific/advertising-related-services/596671-1.html
Will Foxtel's free iQ offer prove a smart move? – Jesse
Hogan
The Age – November
17, 2008
† We also have a number of
VHS tapes, cassette tapes, LP’s and 45’s – however, they are not from the
current decade – so are omitted.