Australia’s SVOD market to overtake pay-TV by decade end

Rebecca Hawkes
| 28 June 2016

Australia’s subscription video-on-demand (SVOD) base should double to 4.1 million by June 2019, from the 1.9 million paying users registered at the end of June 2016, say analysts at Telsyte.

telsytecomauThe pay-TV base in Australia, currently numbers 3.3 million subscribers (mostly taking Foxtel’s service), but by the end of the decade will be overtaken by SVOD, predicts Telsyte.

As of the end of June 2016, Telsyte suggests there are 2.7 million active subscriptions to SVOD services in Australia – including those signed up to free trials. This represents a growth rate of 46% over the same period in 2015. Netflix and local VOD services Stan and Presto now account for around 85% of all subscriptions, while other SVOD providers deliver sports, including NBA basketball, UFC matches and AFL.

“Despite Netflix exploding onto the scene, local players Stan and Presto have been growing faster than Netflix in the past 12 months as appetite for more content drives people to adopt a second or third provider. One in five Netflix customers has more than one SVOD service according to Telsyte research,” the analysts’ statement said.

An additional finding is 43% of Australian households now subscribe to either pay-TV or SVOD services, a 4% increase on the previous year. The average number of SVOD subscriptions per subscribing household has increased from 1.5 to 1.7 during the same period, said Telsyte.

SVOD also accounts for 30% of subscriber’s mobile data allowance and mobile SVOD subscribers typically have a 65% larger net data cap than those who do not stream on demand video via their mobiles.

The growth in streamed content also provides opportunities for third party players like Google, Apple, Telstra, Sony and Samsung, said Telsyte, adding “the ability to universally search across multiple service providers, including on smartphones and smart TVs, will be a compelling way for people to access SVOD content in the future”.

One in four SVOD subscribers indicated an interest in video content delivered through virtual reality (VR) headsets, researchers found. SVOD users are also twice as likely to own an Ultra HD TV and 20% have already shown interest in streaming 4K content over Australia’s new broadband network.

“New services such as VR and 4K streaming could redefine SVOD services, especially for sports related content, and have the potential to lift monthly spend,” said Telsyte.