SYDNEY, AUSTRALIA – Uptake of subscription video on demand (SVOD) services delivered over the Internet has skyrocketed in Australia with two million active subscriptions recorded at the end of June 2015, according to new research by emerging technology analyst firm Telsyte.
Up from 315,000 subscriptions at the end of December 2014, the massive growth has been driven by the arrival of new services such as Netflix and Stan, free trial periods, and promotions offered by the leading ISPs, mobile carriers and TV manufacturers.
Telsyte’s Australian SVOD/OTT Video Market Study 2015 shows that around 1.5 million of these subscriptions have been converted to fee paying (no longer on a trial) and generated more than $17 million in revenues in the month of June.
The paid subscriber market leaders, in order, are: Netflix, Stan, Presto and Quickflix*. Together the top 4 represent around 90 per cent of all paid subscriptions; however, there is a long tail of providers covering sports and special interest niches like AFL, NBA basketball, NRL and UFC matches.
SVOD services are delivered over broadband Internet connections rather than traditional broadcast television signals. Most service providers support set-top boxes (e.g. Apple TV), computers and post-PC devices (smartphones and tablets) for viewing; however, two-thirds of people use their TV as their main screen to watch SVOD services.
“The SVOD market is highly competitive, seasonal, and unlikely to be a winner-takes-all marketplace,” Telsyte Managing Director, Foad Fadaghi, says.
A complicated web of streaming content rights as well as the widespread availability of free trials has resulted in SVOD subscribers having an average of 1.6 services.
Despite the increasing competition for eyeballs in the Australian online video market, Telsyte research indicates streaming Catch-up TV, SVOD and traditional Pay TV will co-exist.
At the end of June, almost 40 per cent of Australian households that had SVOD services also had traditional Pay TV.
“The early success of SVOD providers will encourage more film studios and content rights holders, including sporting codes, to consider direct streaming to consumers,” Fadaghi says.
Despite the rise of SVOD, public broadcaster and advertising-supported streaming services remain the most popular online video services in Australia. Telsyte estimates seven million Australians 16 years and over, regularly (at least once a month) view Catch-up TV services such as the ABC’s iView and Channel Nine’s 9Jumpin.
The lowering of prices by Foxtel in reaction to SVOD competition has seen an uplift in Pay TV subscriptions during the same period of rapid SVOD adoption. Pay TV subscriptions, including Foxtel, Fetch TV and others, was estimated to be 3.1 million at the end June.
SVOD and Catch-up TV to drive nbn adoption
SVOD and Catch-up TV services are expected to drive demand for high-speed broadband upgrades, particularly with the arrival of 4K (Ultra High Definition) content over the Internet.
Telsyte research shows that 1 in 5 broadband users (22%) intend to upgrade their fixed broadband due to streaming video.
Furthermore, more than half (53%) believe their current fixed broadband might not be fast enough for streaming video services.
Telsyte believes mobile carrier partnerships will be increasingly important to SVOD service providers as they help drive subscriptions that are also used over fixed-line broadband Internet connections.
For further information on the study or media enquiries contact:
Tel: +612 9235 5851
*Editors please note, Telsyte will not be supply individual SVOD provider subscriber estimates to media.
Telsyte’s Australian SVOD/OTT Video Market Study 2015 is a comprehensive study which provides subscribers with:
• Uptake of SVOD services, Pay TV and Catch-up TV services
• SVOD provider market share
• SVOD forecasts
• Analysis of current offerings in the market
• Services consumption preference through devices and screens
• Insights into the future of SVOD, Pay TV and Catch-up in Australia
In preparing this study, Telsyte used:
• Interviews conducted with executives from SVOD providers, mobile operators, media companies and channel partners
• An online survey of a representative sample of Australians 16+ years of age conducted with 1,025 respondents in May 2015
• An online survey of a representative sample of Australians 16+ years of age conducted with 1,251 respondents in November 2014
• Financial reports released by service providers
• On-going monitoring of local and global market and vendor trends
Telsyte delivers strategic insights and advisory services to businesses that are producing, or are impacted by, disruptive technologies. Telsyte publishes studies into emerging consumer and business markets and provides custom research and advisory services. Telsyte is a wholly-owned independent business unit of UXC Limited. UXC is an ASX-listed Australian IT services company and the largest Australian-owned ICT consultancy firm with over 2,500 customer organisations in the private and public sectors across Australasia. www.telsyte.com.au
The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial/non commercial purpose, except for news reporting, comment, criticism, teaching or scholarship