SVOD steals a march as Australians continue to spend more on video entertainment | VOD | News | Rapid TV News
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Australian consumers are set to spend a total of A$5.3 billion on video entertainment in 2019 showing a rise of 3%, according to Futuresource Consulting.
netflix 17april2018
Subscription video-on-demand (SVOD) households, which are on course to overtake those of pay-TV in Australia by the end of the year, and greater box office receipts are both key factors in the rise.

“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 A$88 in 2014 to $65 in 2018, prompting a 7% fall in overall pay-TV revenue in 2017 and a further 4% drop anticipated in 2018 to $2.6 billion. Longer term, revenues are expected to decline on average by 2% each year, but will still outperform SVOD, said Futuresource.

Pay-TV and SVOD services are considered complementary, with 65% of pay-TV subscribers in Australia also taking an SVOD subscription, according to the consumer research survey Living with Digital.

Australia’s video streaming subscriptions are set to reach 6.1 million by the end of 2018, with Netflix leading the charge. SVOD spend grew 55% in 2017, with a further 48% expected in 2018 to reach $647 million. This represents nearly half of all home video expenditure in Australia.

“Netflix continues to witness a rapid rise in Australia and is undoubtedly one of its most successful international markets. In 2017, it reached a landmark 2.8 million subscriptions, matching Foxtel’s subscriptions, the leading Pay-TV operator,” added Wright.

“Stan and Foxtel Now are witnessing healthy growth in the SVOD sector, but have yet to take-off in the same way as Netflix.”

Competition for these streaming services is now emerging, with Amazon’s Prime Video service becoming available from June 2018, CBS to launch All Access by the end of 2018, and Disney expected to enter the fray in 2019.