Expected exit of Optus from sports streaming market leaves race in Australia finely poised
Optus Sport are expected to sell the broadcast rights to the Premier League to Stan Sports in a deal worth around $300m.
Optus Sport are expected to sell the broadcast rights to the Premier League to Stan Sports in a deal worth around $300m. Photograph: Peter Byrne/PA
One of the pioneers of Australian streaming is set to depart the local market as early as this week, marking the end of the first epoch in the over-the-top sports broadcast revolution.
Optus Sport is close to selling its suite of rights, including its jewel the Premier League, almost nine years after it launched in Australia. The exit will be the sector's biggest departure during a decade-long rights-grab, as fans of some sports were left with no choice but to pick up two or more pay-TV platforms in order to follow their favourite sports.
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Stan – owned by Nine Entertainment – is now the only home-grown sport subscription streaming player in Australia, following the acquisition of Foxtel by UK-based, Saudi Arabia-backed Dazn earlier this year. Stan was set up in 2015, initially as a joint venture between Nine and Fairfax Media. After an initial focus on entertainment, its anticipated acquisition of Optus' rights for an expected sum of around $300m establishes the Stan Sport brand as the clear No 2 behind – and major challenger to – Foxtel/Kayo Sports, which holds the rights to AFL and NRL.
The Stan deal is set to be announced in coming days, but it has been business as usual for Optus Sport. The telco has been promoting the Uefa Women's Euro 2025 tournament, which gets underway early in July. An Optus spokesperson said 'all companies regularly review their businesses to ensure they are maximising value and realising their full potential – Optus is no different. We don't comment on speculation.'
Optus Sport launched in 2016 as an early sports streaming specialist, part of the so-called over-the-top (OTT), Netflix-style distribution model that bypassed traditional cable or satellite-based providers and instead used the ordinary internet connections of customers to deliver content.
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Sports rights consultant Jon Marquard – who was involved with Optus Sport for much of its time in Australia, up until around 18 months ago – said the strategy worked for a time but the company has shifted focus in recent years.
'That period of 2019 to 2023, culminating in the Women's World Cup, added around $1bn to the brand value of Optus when it had faced other challenges including the major outage and cyber incident,' he said.
'It was undeniably a good thing for the first six years, but the writing has been on the wall for a while relative to other streamers, as globalisation has occurred and new players have come into the market, and Optus hasn't been able to keep pace with that.'
Amazon – through its ICC cricket rights – and Disney – via this year's introduction of ESPN on its Disney+ service – are now prominent in the Australian marketplace, while other online subscription players including Netflix and Apple have purchased rights overseas.
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Although Optus' football offering has been comprehensive, including the Women's Super League in England, J.League and international competitions, it was not able to become the pre-eminent destination for fans of the sport. Paramount+ screens Matildas, Socceroos and A-League football, and Stan Sport has rights to the European Champions League.
'It's a credit to Nine to keep going and look to increase scale,' Marquard said. 'To go out and reinvest in rugby domestically and the World Cups, and now increasing their football portfolio, they need that.'
Stan will be broadcasting Wimbledon, the British & Irish Lions tour and the pay-per-view boxing bout between Paul Gallen and Sonny Billy Williams in coming weeks, underlining its growing presence across multiple sports.
But Marquard suggested a more compelling sports offering gives Stan an opportunity to increase the number of its customers subscribing to more than just its entertainment package. Stan's basic package costs $12 per month, while Stan Sport – introduced in 2020 – is an additional $15. The Gallen-Williams fight costs $70. Stan has reported 2.3m subscribers, but only a fraction of those also pay for sport.
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'As a result of this acquisition, I would expect them to look at their product offering again to see how they can get their sport package to a larger proportion of their customer base,' Marquard said.
The exit of Optus Sport, which has Premier League rights until 2028, means one less subscription for football fans – saving $10 per month for Optus customers or $25 for others. However, the picture has been complicated by Kayo's re-emergence in the sport. The Fifa Club World Club is currently being shown on Australia's most popular sports streaming platform as a direct result of Dazn's $US1bn deal with Fifa.
The Dazn acquisition is likely to trigger more changes for the local market. Around 100 Foxtel staff were made redundant in April, and Kayo increased its monthly pricing by $5 this month; its standard package is now $30.
The NRL rights from 2028 are currently being negotiated. Stan's commitment to growing its portfolio, together with its place in the stable of current NRL free-to-air partner Nine, means a partnership with another pay-TV provider – like the current share with Foxtel/Kayo – makes little sense.
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Yet Dazn, backed by Saudi Arabia's Public Investment Fund, has deep pockets. It paid $3.4bn to acquire Foxtel and its 4.7m subscribers in Australia, and it appears patient in recouping its investment in the Club World Cup. While all matches are available on Kayo, both live and as replays on demand, the tournament is also available on the Dazn platform, which is still available to Australian customers. There – in line with its approach overseas – live matches are free but replays, higher quality video and sound, and fewer ads are only available to subscribers for $30 per month, or $15 for an annual commitment.
While free-to-air television is still considered by lawmakers to be Australians' primary mode of watching sport – thereby ensuring its major events are protected under anti-siphoning law – enough will soon cut the cord and move to internet-served smart TVs and mobile devices to challenge this legacy dynamic. The recent investment by Seven and Nine in their own ad-supported online platforms suggests they know what is coming. But for now, the Optus exit leaves the sports streaming race finely poised.
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