$20m float for pay-TV player
12 April 2006
The West Australian
A new niche player is about to launch itself on the pay-TV market
with a low-cost strategy it hopes will address a continuing lack
of interest by most Australians in paying for what they watch on
SelecTV, headed by former Foxtel boss Jim Blomfield, is about to
start marketing a no-frills pay-TV service which will offer 20 channels
for $29.95 a month compared with industry giant Foxtel's packages
which cost $50 to $100 depending on the options taken.
The SelecTV offering is squarely aimed at an over-50s audience and
other lower income groups which it believes are unwilling to stump
up the relatively high cost for pay-TV in Australia.
Its other target market is ethnic audiences via Spanish, Greek,
Italian, Vietnamese and German packages which have also just been
switched on in the past few days and cost between $19.95 and $44.95
The marketing campaign which will get under way in the next two
to three weeks coincides with the imminent float of SelecTV. It
is expecting to lodge a prospectus in the next few days to raise
around $20 million at 20<cents> a share, which will represent
a third of the listed company.
It has already raised $16.5 million from investors since last August
to set up its satellite-based services, in the process accumulating
some prominent seed shareholders including Melbourne's Myer family,
tycoon Dick Pratt and Wilson Asset Management.
Corporate adviser David Williams of Kidder Williams, which is advising
SelecTV on the initial public offer, said pay-TV's penetration in
Australia had stalled at around 23 to 24 per cent after a decade.
"I think it's just the cost," he said.
The English-speaking package has five movie channels, news channels
BBC World, CNN, Bloomberg and Euronews and a smattering of lifestyle
and documentary channels including National Geographic, MTV and
Its sport offering is limited to a couple of Europ~ean channels
which Mr Blomfield said reflected that most Australians could get
their fill of major sports like cricket and football on free-to-air
TV and were likely to be able to do so for the foreseeable future
under proposed new media laws which will continue to limit pay-TV's
access to mainstream sports.
The service requires subscribers to have their own reception equipment,
estimated to cost around $400.
The model is really totally different from anything that's really
existed," Mr Blomfield said. "We see a few gaps."
Mr Blomfield said SelecTV's subscriber targets were relatively modest.
It anticipated breaking even in two years with only 80,000 subscribers.
"We are looking at 150,000 subscribers in five years out of
6.5 million homes in Australia that don't have pay TV," he