After a turbulent round of negotiations between KPN and Fox Sports, played out in public through the media, KPN customers can now benefit from an attractive offer of cheaper access to Fox Sports. Premium channel HBO may see itself losing subscribers as a result.
KPN appears to have given in to Fox's demand to reduce the cost of a subscription to its sports channels, while several smaller providers such as Tele2 have rejected the new terms. KPN's new offer means Fox Sports Eredivisie, with access to top Dutch football, is cut to EUR 7.50 per month from EUR 17.50 previously. In addition, customers taking both fixed and mobile services under the KPN Compleet offer can choose Fox Eredivisie as one of their free options.
The free offer for Compleet customers may prove painful for HBO. In May 2015, KPN added HBO as one of the free options, alongside its Plus TV package and the kids package. KPN Compleet customers can choose a different free TV package each month. Fox Eredivisie is now included in that list, and in a mailing to Compleet customers KPN highlighted the possibility of swapping HBO for the Fox package. The marketing decision may have been driven in part by the fact that KPN's main rival Ziggo owns 50 percent of HBO Netherlands.
KPN Compleet helps grow HBO subscribers
HBO's subscriber penetration has risen since it was added to the KPNCompleet offer. In absolute numbers, this means around 150,000 additional subscribers since May 2015, for a total of 350,000 in the second quarter of 2016, according to figures from the Telecompaper Consumer Panel.
The growth appears largely due to the strong increase in KPN TV subscribers taking HBO. The share of KPN customers with HBO has doubled since May 2015, from 7 to 14 percent. With Fox now also an option on KPN Compleet, it appears highly likely this will have an impact on HBO's base.
Seasonal effects will play a role, as KPN Compleet customers can change their free option each month. With the start of the new football season or around the finals in the spring, more may opt for Fox, while a popular series on HBO could boost the latter's numbers. During the summer and winter pauses in the football season, HBO may also see a temporary increase.
An HBO subscription normally costs EUR 15.50 per month, but with the price cut for Fox at KPN, it's now twice as expensive as the premium sports package. Customers can now subscribe to both Fox and Netflix for the same price as HBO alone. The coming months will show the impact on HBO's subscriber numbers and whether it needs to take action on its pricing.
