Adapt or Defend: What’s Next For Australia’s Existing Video On Demand Services?
Netflix is coming. This much we know. But what does that mean for the existing services already in the Aussie streaming space? Craig White from EzyFlix.tv has some thoughts.
Trying to predict exact outcomes of iterative yet still subtle change with any form of accuracy is almost impossible. However, envisaging a ‘future state’ over a five, ten or twenty year horizon can be far more insightful particularly if you can look backwards over the same periods to look for trends that may well be continuing.
Case in point, it was as early as 1991 that now former US Vice President Al Gore popularised the phrase the “Information Superhighway”, seeking to garner support for a fibre optic cable network which would link everyone at home or office to everything else—movies and television shows, shopping services, electronic mail and huge collections of data.
Back then, Gore probably made almost no sense to the greater majority of folks whom at that stage didn’t even own a DVD player.
Twenty years later I was lucky enough to hear him speak at an internet retailer conference where he claimed the “internet is the fastest growing and most disruptive technology in the history of the world”.
I wondered for a moment if his assertion related back towards the time of his earlier mutterings about the “Information Superhighway” or if it was more a forward looking statement that will prove to again impact our lives as profoundly.
History shows a small challenge can create big changes
As far as business models go, 20 years is a long time. It was almost that long ago that Reed Hastings founded Netflix (1997) after receiving a $40 late fee from his local video store. He decided that an ‘all you can eat’ monthly charge for both avid and causal customers was a good idea, in much the same way as his gym membership worked.
Back then, even Hastings couldn’t have foreseen the rise and rise of Netflix, including the launch of its streaming services.
It was clear by the mid 2000’s that entertainment industry giants like Blockbuster Video and other US video chains were too slow to adapt to the change in the competitive landscape that the Netflix value proposition brought.
Their entrenched business model and revenue sources (which included very lucrative late fees), combined with heavy debt loads, hampered their ability to adapt to what was then a very small but significant change in the competitive landscape.
What these companies really needed to do was to more fundamentally challenge, rather than defend, their existing business model to meet the changing behaviours of customers, who will naturally always gravitate to businesses that provide the best convenience and value.
Netflix in Australia
Even before Netflix officially arrives, it has already caused stir with incumbent broadcast media companies. You would hope so given the lessons learnt by traditional print media companies in the face of threats from carsales.com.au, seek.com and real-estate.com.au.
But the question of whether such organisations are ready to adapt and do so quickly enough remains open.
History dictates that it is better and ultimately less costly to challenge your existing business model and adapt to fundamental change rather than to play defence against an onslaught of insurgent start ups and more nimble players that don’t have any legacy revenue to protect, can access capital and whose guiding principle is to delight the consumer first, not the stock market.
What we are currently seeing is price being used as a tool by the likes of Fetch, Foxtel, Presto and others, who have all halved the cost of their content offerings over the past year or so. While attractive to consumers, what we are seeing is still defensive play.
It’s akin to when the rail industry dropped train ticket prices while adding other luxuries to the travel experiences to combat the then fledgling airline industry. While it made them slightly more attractive, the crux of the issue was that there was a new, better way for consumers get what they wanted.
A defining year for Video on Demand
2015 will be a watershed year for online video in Australia. I don’t envisage the end to the consumption of Free to Air TV or the local council being immediately overwhelmed with the sheer number of IQ or Fetch set top boxes that churned customers will lay on the curb side awaiting collection.
But there will be wholesale change in consumer behavior fundamental enough to substantially disrupt the establishment. It is only a question of when.
With three to four subscription video on demand (SVOD) services in the market, including Stan and Netflix to come, Australia will have gone from being under-served to completely saturated. In no market in the world, including the US, are there more than two meaningful SVOD players.
Here, the old adage that the big don’t always eat the small, but the fast will always overtake the slow will ring true. Adapting to change will determine the ultimate winners and losers.
Undeniably, only one or two large scale SVOD services will prevail in Australia and other broadcast media establishments with their ‘minimum cost over 12-24 months’ asks will be ‘unbundled’. Subscription TV will be a success in smaller consumer driven choices of bundles. And switching providers for such bundles will become as easy as changing the channel on the TV.
Netflix will be a winner locally because even with a watered-down content offering relative to its U.S service, it will still provide a torrential waterfall of content and choice relative to local providers.
But with over 50 million subscribers worldwide and a market value of US$20B, compared to Time Warner’s US$70B (owners of HBO and CNN which was subject to a recent takeover offer from Murdoch), I also am betting Netflix will soon be in Murdoch’s acquisitive sights (if not already) rather than his competitive frame of reference.
So what about me?
For EzyFlix.tv, SVOD services and even Netflix are highly complementary. History shows SVOD services were, for most US consumers, their first entry point into online video. And EzyFlix.tv’s offering and business model is nimble enough to stand apart from some of the pack.
As EzyFlix.tv focusses its mission to provide earlier access to the latest new release movies from every major Hollywood studio – something that Fetch, Foxtel, Netflix, Presto, Stan and QuickFlix cannot claim – we stand in a good position compared to our competitors.
We’re also able to ‘go rogue’, experiment and as a local startup, fight for our consumers. For example, we’ve recently announced a new pricing promotion that gives Australians access to the latest movie titles for the same price as their US counterparts for the festive season.
This is a pitch to show that entertainment providers can in fact deliver increased value and access to top content, and hopefully it will back up the theory that Aussies will buy (rather than just illegally download) content when it is priced fairly.
But one tactic will never be enough, and with direct pay per view competitors like Apple and Google and possibly Amazon enhancing their offerings, I will continue to play the challenger and seek to adapt quickly to whatever 2015 has in store.
Please login with linkedin to comment
Bloke Caballeros Creative in-store marketing lisa ronson Peugeot 308 RefreshLatest News
The Unapproved Climate Certification Allegedly Causing Mass Greenwashing
Are you left flummoxed in the canned tuna & free range eggs aisle? Just wait till this green certification gets up.
TV Ratings (22/04/2024): Fans Mock “Over The Top” Reaction To New MasterChef Judges
MasterChef returns for its 2024 season. B&T stands by putting peppercorns in Gravox & no one will be any the wiser.
Dentsu Restructure: Muddle, Harvey & Johnston Take Leadership Baton As Bass & Yurisich Exit
A large broom has swept through Dentsu's local ops this morning, taking with it some big names & the air con's cobwebs.
Industry Shares Trends Shaping The Industry This International Creators Day
B&T's asking adland creators to reveal their top trends. And it's not good news for your Jenny Kee cardigan collection.
Mable Extends HOYTS Sensory Screenings Partnership
Mable has extended its HOYTS sensory screening partnership. Vigorously defends its two-star Oppenheimer review.
Orphan Launches ‘They Need Our Help. We Need Yours’ For Children’s Cancer Institute
Anything to do with childhood cancers has B&T's 110% support. That said, we do ignore the red meat & alcohol warnings.
Smile Team Orthodontics & Keep Left Collaborate On Smile-Inducing Campaign
As parents would attest, given the cost of orthodontics you'd expect this campaign to be a lavish production indeed.
Opinion: How Video Calls Neglect Learning Diversity
Need an excuse to duck out of a video call this arvo? Show this to your boss.
DoubleVerify Achieves First-Of-Its-Kind Responsible AI Certification From TrustArc
DoubleVerify receives responsible AI certification. However, not its robotic vacuum that's been seen menacing the cat.
Smile For A Good Cause: The Social Media Campaign Giving Back To The Community
Are you known as the office Austin Powers? More for you teeth than shagability? Get snappy new fangs with this news.
Elon Musk Mocks Albo After ESafety Wins Court Injunction Against X
Albo's 2024 from hell continues - Rabbitohs in crisis, down in the polls and now feuding with world's richest man.
Real Estate Developer In Hot Water Over “Sexually Exploitative” OOH Campaign
Real estate agents again tops in the 'least trusted profession' polls, nudging used car salesmen & ad creatives.
Epsilon’s Shane Hanby: Post-Cookie Era Relies On “Teamwork” Between Brands, Marketers & Tech
This pro predicts more "teamwork" in a post-cookie era. Which spells bad news for the uncooperative or plain stubborn.
Entries For Five Decades Of Advertising Graduates Awards Close On Monday
Entries for the Five Decades of Advertising awards close Monday. And no extensions! Any bribery is open til Wednesday.
Cadbury Extends Commitment To Women’s Sport With Sweet New Wallaroos Deal
Rot your teeth, get fat and support women's sport all at the same time with this sweet new sponsorship arrangement.
Campfire X & Nando’s Partner To Acknowledge Traditional Land Owners Across Australia
Chicken chain unveils important First Nations initiative. The actual chickens more concerned with the Adani coal mine.
Lisa Ronson, Naysla Edwards & Ben Hill Join MFA Awards Signature Judging Panel
MFA Awards adds some serious clout to its judging panel. Still no confirmation Paulini will be performing on the night.
Connect Hearing ‘Sounds Good’ Platform Via Bread Agency
Every office has that one hard of hearing person that's oblivious to the fact. Ramp up their insecurities with this.
Ipsos Iris Data: Australians Prioritise Entertainment & Sports Over Serious News In March
Data shows Aussies prioritising light entertainment over hard news. And who can blame them if you've seen the hard news!
Fur Media Partners With Mad Paws To Support Advertisers
It's never good if your office smells like faeces & brine chunks in aspic. Not if you're pet-friendly agency Fur Media.
MAXIBON Drops Epic Flavour Collaboration Via SICKDOGWOLFMAN
There are few pluses to be had with global warming, except the extension of ice-cream eating season.
Sling & Stone Scrubs Up With Lush Account
Got friends at Sling & Stone? Expect the dreaded loofah and bath bomb for birthdays/Christmas this year.
SBS’s The Cook Up With Adam Liaw Produces ‘Fewer CO2 Emissions Than Industry Average’
SBS could go full vegan for Adam Liaw's seventh season and reduce its TV audience and emissions by 99 per cent.
GumGum & Playground xyz To Merge Media Portfolio, Creating “Powerhouse” Ad Suite
GumGum & Playground xyz tap into consumer mindset. B&T prefers tapping a keg, but whatever works.
All The Winners & Grinners From The TikTok Young Lions Awards Night!
Last week saw every part of the human experience: Exalted, devastated, exhausted & stuffing sausage rolls in the corner.
TV Ratings (21/4/24): Farmer Wants A Wife Wins Sunday Prime Time
Farmer Wants A Wife does make the country life seductive. Apart from the manure stench & the bleating roosters at 5am.
Australia’s Automotive Industry Shifts Gears With CTV
How much was CTV responsible for Australia's record car sales in 2023? Or those horrible oversized American utes?
Australia’s C7EVEN Communications Launches Services In Japan With New Tokyo Office
Aussie comms agency unveils its Tokyo plans. Confirms it's still getting the hang of the toilets over there.
Daniel Goldstein Promoted To Head Of PR At Example
Try as he may to surreptitiously blend in with the wall in his photo, this PR fellow still relatively easy to spot.
Marie Claire & Volvo Partner For The Planet: Nominees For The Inaugural Marie Claire Sustainability Awards Announced
Fashion bible Marie Claire unveils its Sustainability Awards. Yet still refusing to recycle 2023's maxi skirts trend.
Sefiani Unveils A Wave Of Promotions & Appointments
Life's good in PR/comms as Sefiani unveils new hires. Well, bad news for media sites obsessed with redundancy stories.
Yahoo Launches Identity Solutions For CTV
Connected TV just got a whole lot more exciting with this innovation. Bar the incessant Friends re-runs.
Infosum Launches Data Clean Room Solution With Samsung Ads Australia
Infosum & Samsung Ads launch a data clean room solution that's a lot more than a Wettex & squirt of Ajax.
Fast 10: Bread Agency’s Amaury Treguer On Its “Unrivalled” Social Commerce Focus
Bread Agency's Amaury Treguer takes B&T's Fast 10, as he reveals why he won't be sandwiched up against the opposition.
X And Elon Musk To Sue Australia’s eSafety Commissioner Over Sydney Stabbing Takedown Order
If this all wasn't traumatic enough, Elon weighs in to prove he's the world's richest man & world's biggest dickhead.
CRA Siren Award To Be Presented At B&T Awards 2024!
Often attend award nights & think "I wish this night would never end"? Well, B&T's just got that tiny bit longer.