By June 30 this year research outfit Telsyte expects Australians to have bought close to three million active TV subscriptions. This represents a growth rate of 46 per cent over the same period in 2015.

The company’s Australian SVOD/OTT Video Market Study 2016 revealed 43 per cent of Australian households now subscribe to either pay TV or streaming video services. This is  is a four per cent increase on the previous 12 months. And households are increasing the average number of SVOD subscriptions up from 1.5 to 1.7 per household during the same period.

And, according to the study, the total number of paid (excluding trial users) SVOD subscriptions is on track to more than double from 1.9 million in June 2016 to 4.1 million in June 2019.  By then it will exceed the total number of pay TV subscriptions in Australia. As of June 2016 pay TV has a total of 3.3 million subscribers and will continue to enjoy a healthy revenue lead over SVOD.

For third party players like Google, Apple, Telstra, Sony, Samsung and others the growth provides the opportunity for them to consider their content service strategies say the studies authors. In particualr, the ability to universally search across multiple service providers, including on smartphones and smart TVs, will be a compelling way for people to access SVOD content in the future.

The research also suggests that SVOD now takes up 30 per cent of subscriber’s mobile data allowance and mobile SVOD subscribers typically have a 65 per cent larger net data cap than those who do not stream SVOD on mobile.

SVOD revenues up 

SVOD subscriptions will have grown by almost 900,000 during the twelve months to the end of June 16 according to the study. Through high conversions from free or trial usage to fee paying subscriptions, SVOD services are also generating around 40 per cent more revenue than twelve months ago.

The paid subscriber market leaders, in order, are: Netflix, Stan and Presto. Together the top three providers represent around 85 per cent of all subscriptions; however, there is a long tail of providers covering sports and special interest niches like NBA basketball, UFC matches and AFL.

Telsyte managing director Foad Fadaghi said the local SVOD market has entered a new phase whereby the top three competitors are much more aggressively seeking exclusive content rights deals.

He also suggested that Stan and Presto have been growing faster than Netflix in the past 12 months as appetite for more content drives people to adopt a second or third provider (Netflix still dominates the market). One in five Netflix customers has more than one SVOD service according to Telsyte research.

What’s next

Current SVOD subscribers are at the leading edge of display technology with one in four4 indicating an interest in video content delivered through virtual reality (VR) headsets. In the actual living room, SVOD users are twice as likely to own a 4K TV (high resolution) and 20 per cent have already shown interest in streaming 4K content over the NBN.

“New services such as VR and 4K streaming could redefine SVOD services, especially for sports-related content and have the potential to lift monthly spend,” Fadaghi said.

Consumers are prepared to pay more for entertainment content such as movies, interactive games and streaming sports provided in VR say the authors of the report.