SVOD in Australia skyrockets to two million subscriptionsWednesday, July 8th, 2015
Australians flock to SVOD with 2 million subscriptions to online streaming video services taken up this year
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.