Netflix reaches 2.73m in Oz, but growth starts to slow

SVOD market leader Netflix has signed up 1.03 million Australians with a reach of 2.73 million, according to Roy Morgan Research. But indications are that its fast growth in this country is slowing, and its closest rival, the Nine-Fairfax owned Stan, is starting to fire up.

After launching locally in March 2015, Netflix’s fast expansion rated an average of 30% each month from April to September. But according to Roy Morgan, which surveyed 12,000 Australians, it pulled back from October to December.

“Netflix has clearly enjoyed remarkable growth during its inaugural year in Australia, however the recent slowdown in net monthly increases indicates there it will take longer to become truly mainstream,” reported Tim Martin, its GM of Media.

“Technology Adoption Segments show that early adopters, tech-savvy professionals and engaged young social networkers have been the quickest to subscribe to Netflix—and it could take a while longer for the idea of subscription video to gain a foothold among older tech explorers, technology traditionalists and technophobes.”

Stan is on target to hit 700,000 sign ups as it heads for its first anniversary on Australia Day. It had 100,000 sign-ups in December and expects 75,000 more this month. 70% of those who used it as a free trial have started to pay, according to its CEO Mike Sneesby. It will today announce an extension of its deal with Warner Bros, which will see thriller 11.22.63 start to screen in mid-February.

Neither Stan nor the Foxtel and Seven West Media joint venture, Presto, release subscription figures. But analysts say that Australians are realising that the two local companies have stitched up new movies and popular TV shows to exclusive deals and that Netflix’s local content trails behind the US parent.

When Netflix announces its fourth quarter earnings today (Australian time), analysts expect it will announce it has got 1.13 million new subscribers in the United States. Netflix had earlier predicted that figure would be 1.3 million. It is also expected to announce it now has 74 million customers (over 26 million from outside the U.S.).

Earlier this month, Netflix announced a huge expansion globally. From 60 countries in North America, Latin America, Europe and in the Pacific, it is now in 190 countries including India, Russia, South Korea and Saudi Arabia. It broadcasts in 20 languages. It says that shows like Prison Break and Suits are highly sought after in each of its new territories, and that it will move increasingly to exclusive and commissioned shows, which can be launch globally at the same time.

Next week, Roy Morgan Research will look at how the arrival of SVOD in the past year has impacted on declining viewership of commercial TV in Australia.