From watching their favorite shows, cheering on their home teams in AFL and NRL (and probably buying official merchandise from an AFL and NRL shop to show them support), voting for their favorite contestant in a reality TV show to watching the news that broadcasts all that is happening in and around Australia; their love affair with television is something commendable. But is it traditional TV that they are relying on to experience all of this? No, it is on-demand services. Taking Australia by a storm, the advent of on-demand services like Netflix, Stan and Presto have become Australia’s favourite pastime.
Today, every one in four homes has either a Foxtel, Stan or Netflix subscription (if you don’t currently have Netlflix, check out this guide to Netflix Australia!) But as per the predictions made by experts two years ago, despite gobbling up audiences, new subscribers and advertising revenue, the Pay TV operators have not exceeded or even met the expectations they promised to fulfil. Why is that so? Because customers will happily cut the cord of pay TV if SVOD services allow them the leverage to watch whatever they want and whenever they want in cheaper rates than paid subscriptions. But has it made the Aussies cut the cord?
Not really!
In fact, according to Stan chief executive, Mike Sneesby, who fully expected that the advent of SVOD will change the way Aussies watch television, the strategy hasn’t played out well. “SVOD is not a service where you have to take one flavour,” he said. “We are seeing subscribers on both us and Netflix and Foxtel. There is lots of crossover, which shows that SVOD is com plementary to pay TV and it’s also complementary to the SVOD players in the market provided you are heavily differentiated. We know there is very high overlap of subs between Stan and Netflix and Foxtel, and that is very good for us because it tells us consumers value the service and will pay for content.”
His research on the topic showed that 16% of all users who subscribed to on-demand pay services like Netflix didn’t even watch it throughout the week. Thus, to him, it is an absolute waste of money.
According to the latest research conducted in January 2017, 2.27 million of Australians, have a Netflix subscription, Presto is subscribed by 151,000 while Stan has been subscribed by 428,000 homeowners. These statistics provide a clear picture that the pay TV industry in Australia will continue to flourish in the coming times with more and more subscribers choosing Pay TV packages over traditional TV so that they pay only for what they love.
“Given penetration of the Australian market still has so far to go, there is still so much more upside in market growth than there is in market share,” concluded Mr. Sneesby.
That being noted, it is good news for those looking to penetrate the industry with something new and better to offer than Pay TV. Amongst all these things, Australia isn’t going to stop watching television, so there are ample opportunities just waiting to be explored.
