Oz SVOD booms as pay-TV shows decline
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Joseph O'Halloran
| 18 August 2020
Research from technology analyst firm Telsyte has found that the Covid-19 pandemic has boosted home entertainment subscription services in Australia with marked growth across streaming video-on-demand (SVOD), streaming music and games related services.

Telesyte SVOD 18 Aug 2020The Telsyte Australian Entertainment Subscriptions Study 2020 found that that fundamentally video entertainment was more important than ever. By 30 June 2020 SVOD, along with streaming music, remained a leading category in the survey with 16 million subscriptions, a year-on-year increase of 32% from 12.3 million in June 2019. Covid-19 has sent the Australian SVOD services market to new heights as more people in the country spent more time at home, with over half (52%) of SVOD users believing their services have become “essential” since the pandemic.

The Telsyte research showed that Netflix (5.4 million) and Stan (2.1 million) remained the top two SVOD service providers at the end of June 2020. Amazon Prime Video and Disney+ (launched in Nov 2019) both emerged strongly with 1.7 and 1.1 million subscriptions, respectively. Use of Prime Video was found to have benefited from the strong uptake of Amazon Prime subscriptions, measured by Telsyte as a subset of Prime users based on those that use the Video option.

The study also discovered that in the half year there was a pent up demand for sports content as Australians were unable to attend their favourite sporting matches. Indeed, Telsyte believes that the pandemic has only made Australians’ appetite for sports content even stronger, with a surge in adoption towards the end of June 2020 when many sporting codes resumed. Telsyte estimates the total sports SVOD category grew by 11% year-on-year to 4.9 million subscriptions at the end of June 2020. Telstra Sports Live Passes, Optus Sport and Kayo Sports made up around 95% of total sports SVOD subscriptions.

Nearly half (47%) of households that subscribe to SVOD services were found to have more than one service, an increase from 41% in June 2019. The market is well positioned to accommodate multiple providers, as more platforms such as Fetch TV, Apple TV and Foxtel are shaping to be more inclusive, allowing easy subscriptions to multiple services and single billing through the one platform. The study also found 36% Australians are interested in using simplified, one-stop access to multiple services.

The Telsyte research additionally showed that SVOD services have not been the only winners during the past 12 months with free to air TV apps also growing viewership. Broadcasting video-on-demand services (BVOD), including 9Now, ABC iView, etc have benefited as Australians searched for more content during the lockdown, especially as a trusted news sources for information about the current health crisis. The main BVOD platforms had more than 10 million Australians using their service during the 2020 fiscal year and almost half of survey respondents claimed they are spending more time on BVOD due to Covid-19.

In contrast, the total pay-TV market, including residential cable, satellite and IPTV, was at the end of June 2020 down 6% compared with the same time in 2019, to 2.6 million subscriptions. Foxtel’s pay-TV was the main source of the market decline due to increasing adoption of SVOD, which itself is now pivoting strongly towards with Foxtel Now, Kayo Sport and Binge. With its mixed business model as both a set top box platform and an IPTV subscription service, Fetch TV remained the growth engine for the pay-TV market alongside the uptake of broadband bundles based on Australia’s nbn infrastructure.

Yet striking a note of caution, Telsyte observed that disruptions to content production during the pandemic will likely present an issue for services going into the second half of 2020, with research showing consumers are recognising new programme additions are in decline. More than a third of SVOD users felt that there was less new content being added to their services since the pandemic. However, rather than impacting negatively on the market, in the short term Telsyte believes this has driven consumers to consider subscribing to multiple services to address content shortfalls, rather than turning off services.