Futuresource: Australian SVOD homes to overtake pay TV this year

By the end of 2018, Australia is set to become the first country where the number of SVOD households overtakes pay TV homes in any market worldwide, according to Futuresource Consulting.

The research firm said that the uptake of SVOD is expected to reach 6.1 million subscriptions by the end of 2018, following “impressive growth” in the past four years, driven largely by Netflix.

“Netflix continues to witness a rapid rise in Australia and is undoubtedly one of its most successful international markets,” said Joanna Wright, senior market analyst at Futuresource Consulting.

“In 2017, it reached a landmark 2.8 million subscriptions, matching Foxtel’s subscriptions, the leading pay TV operator. Stan and Foxtel Now are witnessing healthy growth in the SVOD sector, but have yet to take-off in the same way as Netflix.”

Amazon Prime launched in Australia in June 2018 and CBS is expected to launch All Access by the end of the year. Futuresource also expects there to be more competition when Disney rolls out its SVOD service next year.

Futuresource’s consumer research survey, ‘Living with Digital’, shows that pay TV and SVOD services are complementary, with 65% of pay TV subscribers also taking an SVOD subscription.

In terms of revenue, Australian SVOD spend grew 55% in 2017, with a further 48% expected in 2018, to reach AU$647 million (€411 million) – which will account for nearly half of all home video spend in the country.

“Pay TV subscription revenue plays a key role in the strength and size of the overall video market, representing half of total video spend”, said Joanna Wright, senior market analyst at Futuresource Consulting.

“Australia has one of the highest pay TV ARPUs (average revenue per user) in the world, but the rise of low-cost pay TV-lite and SVOD services has led to more promotions and a fall in the ARPUs.”

ARPUs fell in Australia from AU$88 in 2014 to AU $65 in 2018, prompting a 7% fall in overall pay TV revenue in 2017 and a further 4% drop anticipated in 2018 to AU$ 2.6 billion. Longer term, revenues are expected to decline on average by 2% each year, but still outperform SVOD.

Read Next

News Stay Updated Icon 1 min read

test 2

News Stay Updated Icon 1 min read

test