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Kim Williams, FOXTEL chief executive, defended Australia’s pay-TV sector against claims that its growth prospects will be reduced by the launch of  more digital channels by free-to-air television networks

According to Mr Williams, the effect of the new digital channels on pay-TV subscription growth would be "short-term" because Foxtel is well placed to meet the structural and technological challenges in the television industry. 

The impacts of Freeview or digital multi-channels as well as time-shifted ratings are seen as critical factors for the industry players this year. 

The free-to-air TV networks predict that digital channels such as Nine Network's Go,  7Two,  Ten Network's One as well as ABC3 children's channel will eat into the existing  audience of Foxtel and Austar.

However, Mr Williams who is in his ninth year as head of Foxtel, told The Australian that the digital video recorder  iQ box that is found  in more  than half of Foxtel viewers had increased pay-TV audiences by at least 1.5 percentage points in the first three weeks of this year based on the  OzTAM metropolitan ratings system.

He argued that based on the experiences in overseas markets such as Britain, the introduction of multi-channels had resulted in only short-term declines in growth rates.

Pay-TV subscription has reached 34 per cent of the population. Christian Guerra of Goldman Sachs JBWere predicts "solid growth" to "continue in 2010 although at a slower rate or at a much greater cost" because of various competitors, one of which is the Freeview platform.

Mr Williams pointed out at Foxtel's "responsiveness" to changes in customers’ habits following technological developments as factors that worked to their advantage. 

Foxtel has invested last year in various improvements such as high-definition channels, interactive program guides, in addition to new content in the 30 channels introduced in September, 2009. In October, an online download service was launched. 

Mr Williams said Foxtel’s 1600 hours of broadcast of the Winter Olympics in Vancouver later this month was an example of how pay-TV could differentiate itself from its competitors.