Subscriptions to home entertainment services in Australia grew by 5.6 million in the year to the end of June as consumers sought out ways to deal with the Covid-19 lockdown.

Mary Lennighan

August 19, 2020

2 Min Read
Australians embrace SVoD as Foxtel flounders

Subscriptions to home entertainment services in Australia grew by 5.6 million in the year to the end of June as consumers sought out ways to deal with the Covid-19 lockdown.

The market was driven primarily by video streaming services, but gaming subscriptions also played their part, according to new data from Australian analyst firm Telesyte. Music streaming subs also crept up during the period, but pay TV declined on the back of weakness from major player Foxtel.

This growth in SVoD services at the expense of traditional and pay TV is a pattern that is being repeated all over the world, as consumers increasingly cut the cord in favour of cherrypicking content from one or more streaming platforms. But we’re not talking complete freedom to pick and choose here: as Ampere Analysis pointed out in recent days, the price ceiling for stacking up SVoD services is still broadly similar to what consumers were previously willing to pay for pay-TV, leaving streaming providers competing fiercely for eyeballs.

That makes content all the more important, and content could be a problem in the second half of this year due to production issues stemming from the pandemic, Telesyte notes. Indeed, more than a third of Australian SVoD users have noticed that less new content is being added to their services since the start of the pandemic, its research shows.

The flip side of this is that consumers are now considering subscribing to additional services to address the content shortfall, rather than cancelling subscriptions, at least in the short term. “Australians continue to show a strong willingness to subscribe to multiple services,” said Telsyte Managing Director, Foad Fadaghi.

Indeed, as of the end of June, 47% of SVoD households have more than one service, up from 41% a year earlier. And with more platforms allowing easy subscriptions to multiple services, including single billing, the stage is set for SVoD growth in Australia. Little wonder then that pay TV providers are looking for a piece of the action.

Foxtel launched streaming service Foxtel Now in its current incarnation three years ago and has since added Kayo Sports and Binge, via its Streamotion unit. However, growth at the last two did not offset declines at Foxtel Now and the pay TV business, according to parent company News Corp’s full-year results released earlier this month.

Nonetheless, Binge attracted 185,000 paying customers – 217,000 overall – between its May launch and early August, which is a promising sign for Foxtel. The firm is doubtless firmly hoping that Telesyte’s prediction that Australians are willing to sign up for – and pay for – multiple SVoD services proves to be accurate.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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