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News March 30, 2017

Report: Australians’ switch to SVOD to double in five years

Report: Australians’ switch to SVOD to double in five years

Australia’s take-up of subscription video on-demand (SVOD) services such as Netflix, Stan and Foxtel Play has been so much more rapid than expected that market researcher Ovum has slightly updated its figures.

Two years ago it predicted that there would be 4.7 million subscribers in this country by the year 2019.

But in the just-released 2017 edition of The Ovum OTT Video Forecast, it predicts a 170% growth in the next five years, from 2.6 million subscribers to 7 million.

The primary factors fuelling this switch are the low price points and the variety provided by the services, along with the rapid sales growth of smart TVs and streaming boxes.

Also a key factor is the rise of screens in Australian households, to a current 2.3 TV sets (42% of which are Internet connected) and 1.6 tablets, along with multiple personal computers and personal devices. This allows for a number of separate services in one household alone.

According to Ovum, most demographics have not turned away from traditional TV but incorporated SVOD views as part of its consumption. The exception were millennials, whose love affair with YouTube and other online video platforms continues.

Both TV and SVOD operators are watching to see if this age group will change its viewing habits as it grows older.

Earlier this month, the Australian Competition and Consumer Commission (ACCC) issued figures that showed that data usage jumped 69%on mobiles and 52% on fixed broadband last year – due, again, primarily to streaming music and video services. And ARIA figures released yesterdayshow that streaming overtook downloads as the dominant source of recorded music revenue in 2016.

nbn™, which commissioned the Ovum report, reiterated that more investment was needed in telco networks as data usage had doubled by Australian households in the past two years due to streaming.

Before March 2015, the average NBN user was gobbling 70GB per month. Currently it is 148GB per month.

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