Foxtel Upfront: Advertisers line up to reach growing Kayo & Binge crowds

Upfront kayo

Binge the new frontier as Kayo Sport ad revenue surges, with advertisers coming back for more

Foxtel Upfront 2023: Foxtel Media chief executive Mark Frain told Mediaweek the business has a great story to share with advertisers about the growing audiences at both Kayo Sports and Binge.

While commercial partnerships with advertisers on Foxtel linear channels and Foxtel on-demand are at an all-time high for the Foxtel Group, attracting advertisers to Kayo Sports is also booming.

In the past 12 months, advertisers have spent around $50m advertising on Kayo Sports. Frain explained those advertisers are coming back for more too. The next Frontier will be offering commercial opportunities on Binge.

“A combination of Fox Sports/Kayo and Foxtel/Binge is very powerful, delivering exceptional growth of audiences,” said Frain.

Foxtel strategy with streaming, first with Kayo Sports and then later with Binge, was build it and they will come. They certainly have arrived – 2.7m at last count.

Frain continued: “We are monetising Kayo very successfully and growing ad revenue. The figures indicate we are up about 150% YoY with more advertisers coming on board. The adage that revenue follows audiences and eyeballs is in play here.

“The renegotiations with clients for 2023 will automatically have increases coming with them as we have emphatically delivered for all of our partners.

“With sport, we have repeat purchase with increased investment from both current brands and newcomers which is fuelling the growth.”


Binge: The new frontier

Regarding Binge opportunities for advertisers, that was the key announcement at the Foxtel Upfront that has buyers taking notice.

“We have successfully been building the Binge platform with the latest public numbers close to 1.5m,” said Frain. “The success that AVOD platforms have been experiencing globally is being mirrored here. A couple of years ago our executive team planned a strategy for what might happen if Netflix turned on ads tomorrow. We asked if we would be ready.

“We made sure across the past 18 months that we were. It is fascinating now to have Netflix announcing the arrival of ads to its platform.”

Frain said that the timing of the Netflix announcement was coincidence. Binge was opening up to advertisers in 2023 regardless of strategy at other platforms.

Binge to welcome brands

Frain explained bringing ads to the Binge platform gives access to an existing audience. “What will be compelling for the ad community is the tier we are building will have immediate scale.

“With Kayo we started to turn on ad capability after building an audience of 200,000-300,000. At Binge we are turning it on, but not from a stand-up start. Advertisers will be able to put Binge on their video plan for 2023 because when it does launch early in the new year it will have a significant audience.”

Premium Binge ad-free tier coming?

There is an expectation Binge will announce an ad-free tier later in 2023 with a higher subscription fee. Although customers on the basic plan might find the ad experience not too disruptive, said Frain.

“The advertising will come with minimum disruption. There will be one pre-roll, one frequency ad per hour and no more than 3-4 ads per hour. A very light ad load. We will ensure we protect the viewing experience on the Binge platform.

While Foxtel isn’t yet revealing pricing and dates of any new platforms, it seems like for $10 and other variations of the basic you will get a light ad load.

If a Binge premium subscription is eventually launched, it will possibly come with no advertising at around $25, similar pricing to Kayo.

At this stage there seems to be no plan to mess with the Kayo ad model. “We are still not interrupting live sport,” promised Frain. “The quality of the sport experience is amazing and we are weaving advertisers through that content with no live play interruptions.”


Watchability is first of three core rules

Foxtel has long traded off a better viewing experience for its paying customers.

Frain: “Not just a better viewing experience, but a better ad experience too. We are seeing that play out now. When people have a poor experience on an IP platform and then go to Binge or Netflix with no ads the difference is stark.

“Watchability is one of the rules when it comes to our platforms.

“Connectivity is another important rule for us. We are partnering with advertisers on the Kayo data to make smarter, more intelligent decisions around media placement.

“The third rule is Useability which comes after 10 FoxTest projects we ran last year with 25 different clients. It tested the attention and engagement of our platform versus others. We have some key stats about how well we performed versus other platforms. All of that points back to better viewing experience, lower ad load, less repetition of ads in a row and lower frequency of advertising.”

Frain said that across inventory research and resources Foxtel Media committed $3m in 2022. “We will increase that to $5m next year. We call that testing our way into the future with our partners.”

Impact of Netflix ads

When asked about Foxtel Media’s attitude to Netflix turning on the ad tap, Frain replied, “Bring it on. Netflix is approaching advertising with a similar mindset to us. These are the new rules of the game. They will also have lower ad loads. With Disney+ too, I would say welcome to the party. They will all be in the same space as us as we grow it.

“We already have $50m of runs on the board with advertisers investing in Kayo. We also have a head start in transparency and measurement and we know what the local market wants. With Kayo we have been supplying certain information to advertisers that have been our major partners for well over 18 months. We are much further down the track of what’s required to win in this area.”

Frain admitted that Netflix will have an impact. “But it will take time and we don’t know what they are prepared to share with advertisers as they have been very tight-lipped so far. Advertisers might want to be part of it, but they are not lining up yet because there are many unknowns.”

Viewing audience data

There had been expectation some time ago that Foxtel Media would be able to release Total TV data combing the Kayo Sports crowd with the Fox Sports audience. It hasn’t happened yet, or has it?

“We are still working with OzTAM to get the Kayo data published daily and weekly in line with what other platforms do.

“But advertisers get to see what we provide from our own data and are happy with it. There was originally market demand to be part of the OzTAM service. However there has been a growing level of acceptance that the data we supply advertisers is so rich and accurate that it works for them. It supplies a Total TV picture to those partners. It is very trusted, but we continue to work with OzTAM with the ambition of being up and ready for the winter codes in 2023.”

See also
Foxtel Upfront: Bring on the ads as Binge joins Kayo to bring in ad dollars
Foxtel Upfront: FoxTest investment increased to $5 million
Foxtel Upfront: BINGE introduces advertising tier in 2023
Foxtel Upfront: Slate of new and returning programs revealed for 2023

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