All or nothing: Why Australia's video streaming players need to step up or step out

  • Date 5th March 2015
  • Author Annalise McDonnell
All or nothing: Why Australia's video streaming players need to step up or step out

For years Australians have been impatiently waiting for streaming companies offering subscriptions to videos on demand (SVOD), so we can start catching up to the US and binge watch 14 hours of House of Cards at a time.  

It’s estimated that over 200,000 Australians are already so desperate to watch the newest season of Arrested Development on Netflix (no judgement) that they view it via a VPN. Netflix will officially launch in Australia on 24 March, and will probably work in a similar way to the US with a 3-tiered payment system, dependent on the number of screens.

The newest player on the scene is Stan, a joint venture from Nine Entertainment Co and Fairfax Media. Since its launch just over a month ago, the service has attracted over 100,000 subscriptions with the help of a handy 30-day free trial – which I decided to take up.

The fundamental change in behaviour has already happened. Music streaming services such as Spotify, Pandora and Google Play are now the norm. Back in 2009, who’d have thought it would be cooler to stream, than have 150GBs of terrible quality MP3s on your device. Music streaming services have given consumers what they want; a low, fixed price, a huge range of music and access on multiple devices.

The problem with video content in Australia is you’ll probably have to sign up to multiple SVOD services and pay multiple subscription fees, just to try and get close to what’s available in the US.

Say your favourite shows are Girls, Orange is the New Black and House of Cards. To watch all of these, you’d have to fork out cash for Presto, Foxtel and Stan, totalling $70 per month (plus your Foxtel box costs). Thanks, but no thanks. If you wanted to stream Game of Thrones too, forget about it. It won’t be available on any streaming services worldwide in 2015.

Realistically, how many subscriptions are Australians willing to pay for to get the content they want?

According to the ABS there are fewer than 8 million households in Australia, and Morgan Stanley analyst Andrew McLeod estimates the market in Australia to be between $850 million and $1.1 billion. Considering this relatively small size, how are these multiple players supposed to turn a reasonable profit?

 The streaming services will need to differentiate themselves if they want to get a significant piece of the tiny Australian pie. Netflix is known for its original shows and has a plan for 2015 to deliver over 310 hours of original content in the US. Much of this is partially funded by (sometimes not so subtle) product placement.

The increase in SVOD providers means content creators have access to audience profiles, viewing habits and preferences, letting them target more specifically than traditional TV advertising ever could.  

Better input always leads to greater outcomes

Subscribe to OutThink, the AFFINITY ThoughtReport


Get in touch and find out what we can do for you
Business hours: 9am - 5.30pm, Mon - Fri

+61 2 8354 4400