What you need to know:

• Foxtel Media chief declines to confirm rumours that it is briefing agencies on an ad-funded tier for Binge set for early 2023 launch.
• But "confident of bringing new sources of inventory" to market.
• Claims biggest sports audiences ever driving triple digit digital growth, addressable ads programme underway with $20m tech investment signed off.

Foxtel could be set to crash the Netflix-Disney+ party by launching an ad-funded tier on Binge. The company refused to confirm potential timings or the volume of streaming audiences that may be opened up to audiences amid market speculation of a December test followed by a New Year launch with circa 400,000 subscribers.

Foxtel Media boss Mark Frain declined to comment on the Binge speculation, but did not rule out packaging some of its subscription video audiences to advertisers. In the immediate term, he said Foxtel’s sales arm is focused on driving advertising growth across the likes of Go and Now.

He claimed the “biggest sponsorship book we have ever seen across sports programming” across both Kayo and its Foxtel subscription TV business as a result of sustained audience growth, driving advertiser demand for new formats.

Sports subscribers are now sitting just short of 2.5 million, said Frain, with 1.3m via Kayo.

In financial year 2022 demand lifted Foxtel’s video revenue growth circa 120 per cent versus broader BVOD market growth of 53 per cent, per ThinkTV figures. Digital accounted for 25 per cent of Foxtel’s $400m total revenues with BVOD ad revenue growth standing at circa $30m across the last 12 months, per Frain.

He indicated the September quarter is following a similar trajectory and predicted growth into the medium term on the back of rapidly growing sports audiences and continued advertiser demand. He said Foxtel was far from a one trick pony, pointing to House of Dragon audience figures, with episode one notching 1.2 million viewers across TV and digital, Foxtel's largest premiere to date.

“We see significant upside for the next few years, because digital revenues are still playing catch-up with digital audience growth. Also linear TV, sitting just under double digit growth, has performed way better than expected. We’re confident we can add new inventory sources to continue that momentum,” he told Mi3.

“Eighteen months ago, digital video made up 7 per cent of our advertising revenue. It will be north of 30 per cent in the new financial year. That’s quite a change in composition.”

Frain brushed off suggestions that more ads within existing video channels could undermine user experience, with Australia’s major BVOD players all facing criticism for a lack of frequency capping – playing the same ads from the same advertisers within the same break.

“We’re not cranking up ad loads. Customer and content experience will stay the same. On the sports side, we’re not interrupting live sport but we are building ad capability around that – magazine shows, pre-game shows and half-time shows,” he stated.

“That’s due to huge advertiser demand – we have more sports sponsorship revenue than ever before across AFL, NRL, cricket and Formula 1 because of the growth in audience – they are the biggest sports audiences we have ever had to sell.” Frain said revenue growth is being driven by a “combination of new advertisers and longstanding partners increasing spend in line with audience growth.”

Further BVOD growth is anticipated from serving different ads within companion devices to those served within the home, previously a “value add”, as well as adding pre-rolls to Now inventory that had not previously been monetised, making up around a third of total digital growth, per Frain.

The company has also inked a $20m project to boost “addressable advertising across every asset we’ve got.” Frain indicated it was a "two to three year programme of work" but said the capital injection "will mean targeted, addressable ads across all Foxtel Group digital IP products ... getting us to our destination of trading one campaign across all of our platforms".