Regional pay-TV provider Austar United Communications has confirmed that its subscriber numbers took a turn for the worse in the December 2000 quarter.
A total of 5,100 subscribers turned their backs on Austar in the three months to December 2000, leaving subscriber numbers sitting at 39,402 - nowhere near its forecast of 60,000.
Austar had not intended to disclose subscriber details until it reported its fourth quarter results in mid-March, but sent a statement to the Australian Stock Exchange after the close of business Tuesday.
Shares suffer
Austar shares suffered a 13 percent fall in yesterday's trading and were trading Wednesday at a record low of AU$1.57.
"Clearly we are disappointed with pay TV subscriber numbers for the fourth quarter 2000," chief executive, John Porter said.
"While we continued to make sales to new subscribers, the number of disconnects increased relative to prior periods."
Lower consumer confidence
Austar blamed the weak retail environment and lower consumer confidence on the back of the Sydney 2000 Olympic Games for the fallout.
Yesterday, ZDNet reported that Austar has yet to find a financial suitor to help plug its draining bank balance.
Austar ploughed its was through AU$232 million in cash in the December quarter, a massive leap from the previous quarter's cash burn rate of AU$81 million.
Austar put its heavy cash spending down to a "one-off" acquisitive spending spree which is "not to be repeated".
The introduction of a single billing system, the opening of trial retail stores to capture more of the market and the development of two-way interactive television services such as t-mail, shopping and games are some of the initiatives Austar claims to be implementing to stimulate subscriber growth across the board.
While I don't know what costs Austar incurs to provide channels to it's subscribers, I would have to say it's decline in subscribers is very easy to work out.
Lack of new or interesting content and high subscription charges.
No amount of playing around the edges with things like online games is going to change the fundamentals. Austar has to figure out a way to increase the flexibility in choosing the content (what channels the subscriber wants - not packages) and lowering the cost by 30-50% over what it is now.
Impossible? It might well be. In which case we await the news that Austar has gone under.
Daniel
Austar Subscriber