Optus-owned Australian streaming platform Optus Sport increased its monthly subscription price from AUD14.99 ($10.41) to AUD24.99 ($17.35) at the beginning of August 2022, with an annual pass rising from AUD99 ($68.75) to AUD199 ($138.19). The Australian telco has bundled Optus Sport for free with most mobile and broadband plans since the service launched in 2016, and this has helped the sport platform reach its 1.01m active subscriber base as of Q1 2022. From August 1, existing subscribers on free contracts will now be billed AUD6.99 ($4.85) a month. Ampere’s Consumer data suggests that around 40% of Optus Sport subscribers currently access it for free through an additional telco service with Optus. 

Optus Sport’s crown jewel is its access to English Premier League (EPL) rights which it renewed last year for a reported AUD600m ($417m), making it the most expensive international sports rights deal in Australian history. Ampere’s Sports Consumer data shows that in Australia the EPL is the second most valuable league to consumers, according to Ampere's willingness to pay metric, with Optus Sport’s other major rights (La Liga and the FIFA Women’s World Cup) coming out as much less valuable. 

Ampere’s Sport Consumer service suggests that the average Optus Sport customer is willing to pay AUD17 ($11.80) for the service, which we expect is driven primarily by the EPL. This sits comfortably above the AUD6.99 a month for existing subscribers, but far below the AUD24.99 a month for standalone subscribers. Optus will be looking to drive mobile and broadband subscriptions by pushing standalone subscribers, which account for roughly 60% of the service’s subscribers, to take out an additional offering from the telco in order to unlock the lower price. Mobile is Optus’s largest offering, with over 9m subscribers, however, growth has been slow, and its market share has been shrinking in recent years compared to rival Telstra, which currently has almost 20m mobile subscribers. 

While a migration of subscribers towards paying AUD6.99 per month for Optus Sport would cause a loss of streaming revenue, having these customers also locked into mobile and broadband contracts would bring much more value per customer to the telco. Looking at Optus mobile, for example, the average postpaid ARPU is AUD39 ($27.08), meaning the average mobile subscriber also taking Optus Sport would have a monthly ARPU of around AUD46 ($31.94), providing some AUD21 more value per customer each month than if all those standalone Optus Sport subscribers stayed on at the increased subscription rate. 

In addition, rival Telstra’s combined mobile ARPU is AUD28 ($19.44), making the combined cost of a mobile plan with Telstra and separate standalone Optus Sport subscription AUD53 ($36.80), significantly more than subscribing via Optus directly. As a result, this may make the new Optus bundle an attractive proposition for consumers, especially those on short- term contracts who can easily switch providers.