Cough Up! Increased Streaming Competition Making Households Pay More For Entertainment

Cough Up! Increased Streaming Competition Making Households Pay More For Entertainment
SHARE
THIS



The rapid growth recorded by subscription video on demand (SVOD) services, such as Netflix, has come at the expense of pay-TV providers.

With a virtual monopoly on the pay-TV market in Australia, Foxtel has recognised the threat this disruption poses.

As a result, the company is now looking to match its competitors’ convenience and lower pricepoints with a brand-new drama and entertainment streaming product.

However, rapid growth in the number of SVOD providers has contributed to a trend of increasingly separated content, with households increasingly having multiple streaming subscriptions.

Streaming for success

SVOD service providers have recorded rapid growth over the past five years. As a result, revenue for the combined Pay Television and Internet Protocol Television Services industry in Australia is expected to grow at an annualised 9.0 per cent over the five years through 2019-20, to $5.6 billion.

“This growth has been almost entirely due to the success of streaming-based products. Netflix Australia alone has grown from $51.1 million in revenue in 2015 to an anticipated $662.1 million in 2019. Other SVOD providers, such as Stan and Amazon Prime, have also recorded rapid growth, and new entrants such as Disney+ are expected to enter the market in the near future,” said IBISWorld senior industry analyst, Michael Youren.

In contrast, dominant local pay-TV provider NXE Australia, Foxtel’s parent company, has recorded a decline in industry-specific revenue over the past five years.

Consumers face increasingly separated content

The ability to access content on demand has made SVOD services increasingly popular with consumers, as they can watch programs at their convenience. Pay-TV providers have traditionally offered much of their content at set times on live broadcast channels, a format known as linear TV programming. This format is also used by operators in the Free-to-Air Television Broadcasting industry.

Other key selling points for SVOD services include:

  • The ability to watch programs on multiple devices anywhere, anytime
  • Low monthly costs without long-term contracts
  • Large libraries of desirable content

“Rapid growth in the SVOD service market has intensified competition. New entrants are increasingly looking to differentiate themselves by providing exclusive content. As a result, some large production companies that hold the licenses for popular television shows are looking to establish their own streaming services,” said Youren.

One such example is production company Warner Media, which has removed its popular sitcom Friends from Netflix with the aim of providing it exclusively on the company’s new streaming service HBO Max.

Other examples include The Walt Disney Company’s existing streaming provider Hulu and upcoming Disney+ streaming service. These streaming services use Disney’s vast library of popular programs that it has either produced or to which it holds distribution rights. Examples include the Marvel franchise, and offer them exclusively on their platforms.

“As more companies seek to operate their own streaming services, the libraries of larger providers such as Netflix are expected to become increasingly compromised. This may make them more reliant on content produced in house. Consumers will no longer be able to subscribe to a single platform to access most of the programs they want to watch, and many will likely have to consider multiple subscriptions in the near future,” according to Mr Youren.

The future of Foxtel and pay TV 

Due to the success SVOD providers have had in Australia, Foxtel has responded by introducing streaming options for their library of content. The company first replicated its full pay-TV offering on a streaming service named Foxtel Play, which has since been renamed to Foxtel Now. However, the company introduced a new strategy of splitting up content on separate streaming platforms with the successful Kayo Sports product.

The company is now looking to expand its SVOD options in the form of a new drama and entertainment specific streaming platform. Much like Kayo, this service will offer customers access to a vast library of Foxtel-owned content on demand. The key selling point of this service will be a low pricepoint, attracting customers that are unwilling to pay high costs for a full Foxtel subscription.

In an effort to retain their pay-TV customers, Foxtel has announced significant changes to their pay-TV product. These changes include a new user interface that integrates Netflix and on demand content from local free-to-air providers, alongside access to traditional Foxtel-exclusive content.

“Foxtel has stated an aim to position their pay-TV service as a premium content aggregator, whereby viewers use their products and interfaces to access vast libraries of content from multiple providers. This strategy aims to make the company’s pay-TV product more convenient to use, and act as a first point of call for viewing activities,” said Mr Youren.

To enhance this position, Foxtel is offering free half-year subscriptions to Netflix as part of their pay-TV program. Announcements of new pricing options for premium pay-TV services are expected to be released over the next few months, with Netflix and other streaming content likely to be included in new bundled plans.

Please login with linkedin to comment

Foxtel Netflix Streaming

Latest News

Silverbullet Achieves Adobe Audience Manager Specialisation
  • Media

Silverbullet Achieves Adobe Audience Manager Specialisation

Silverbullet Data Services Group (Silverbullet), has become one of only four businesses globally to achieve Adobe Specialisation in EMEA for Adobe Audience Manager. Adobe Specialised Partners are acknowledged as the most skilled technical practitioners throughout the global partner ecosystem. Specialisations are earned after organisations achieve a level of certified expertise in an Adobe solution and […]

Adobe Launches Adobe CQ To Measure Creative Aptitude
  • Technology

Adobe Launches Adobe CQ To Measure Creative Aptitude

Adobe today launched Adobe CQ (creativity quotient), an evaluation tool designed to measure enterprise creative aptitude and capability across teams and organisations. The persona-based test will help leaders understand how to use creativity, cultivate it and accelerate skills development. Adobe managing director for ANZ Suzanne Steele [feature image] said: “With the exponential growth of technology and […]

Businesswoman hand connecting jigsaw puzzle, Business solutions, success and strategy concept
  • Technology

General Mills Partners With Zyper To Build Virtual Superfan Communities

Food company General Mills has partnered with Zyper, a marketing platform that connects brands with their superfans, to build virtual fan communities for General Mills’ brands. As part of the agreement, General Mills will use Zyper’s software to initially identify the Betty Crocker and Fibre One brands’ top one per cent of fans on social […]

Facebook Pledges $500,000 To Group Admins Across Australia
  • Technology

Facebook Pledges $500,000 To Group Admins Across Australia

Facebook is continuing its Facebook Australia Groups Impact Fund, today announcing $500,000 in funding for the program. The grant was originally designated for bushfire recovery groups, however, has now been extended to local communities across the country who might be facing hardship. Facebook said it is on the lookout for groups that have a positive […]

Canon Australia Named Official Imaging Partner For Sydney Zoo
  • Media

Canon Australia Named Official Imaging Partner For Sydney Zoo

Canon Australia has today become the first official Imaging Partner of Sydney Zoo. The two-year partnership will see the two experience-led organisations bring to life a variety of on-site and digital platform photographic and creative print activations; each with the purpose of extending the creative and educational experiences of every guest to Sydney Zoo. From […]

Daily Telegraph Loses Geoffrey Rush Appeal
  • Media

Daily Telegraph Loses Geoffrey Rush Appeal

Judge says Geoffrey Rush can keep the cash, however, warns him about making any more 'Pirates Of The Caribbean' sequels.

by B&T Magazine

B&T Magazine
Home Office Set Up for Webinar and Teleconference whilst respecting the lockdown due to the corona virus outbreak
  • Media

Shootsta Wins Orica, Vision Australia And Veolia As Demand For Webinar Continues

A pivot towards producing digital webinars, podcasts and animations for clients has seen global vid tech scale-up Shootsta win several new major clients. Since March, Shootsta has secured local work with Orica, The Royal Commission, ASG Group, Teachers Mutual Bank, Savills, Veolia, Vision Australia and Sydney Children’s Hospital Foundation. Globally, it has won contracts with […]

Facebook Responds To Advertiser Boycott
  • Technology

Facebook Responds To Advertiser Boycott

Facebook has responded to the current advertiser boycott and it's both direct with just the right smattering of grovel.

by B&T Magazine

B&T Magazine
Audiences Strengthen As More Australians Get Back To Fitness
  • Advertising

Audiences Strengthen As More Australians Get Back To Fitness

Val Morgan Outdoor (VMO) has revealed that audience numbers are averaging 60% pre-COVID levels at VMO Active fitness centres across the country. Western Australia, where health clubs were the first to reopen in May, is now sitting at a 12.4% week-on-week increase, with a return-rate of 72% overall, which Val Morgan anticipates will be reflected […]

Sparro Promotes Hannah Jones To GM
  • Advertising

Sparro Promotes Hannah Jones To GM

Independent digital marketing agency, Sparro, has today announced the promotion of Key Account Director, Hannah Jones, to General Manager. Jones, who joined Sparro in September 2017, has played a pivotal role in shaping the agency’s unique and award-winning culture and expanding the company’s client portfolio. Sparro Co-Founder and Partner, Morris Bryant, said appointing Jones as […]

Jardin Anderson Joins Emotive As Senior Creative
  • Advertising

Jardin Anderson Joins Emotive As Senior Creative

Integrated Creative Agency, Emotive, today announces the appointment of Jardin Anderson as Senior Creative. Jardin joins Emotive’s creative team with plenty of adland experience including roles at The Glue Society, M&C Saatchi Sydney and DDB Melbourne. Jardin Anderson said:​ “​ I am super excited to be a part of the Emotive creative collective. The creative […]

Retail Out-Of-Home In Combination With Television Delivers Greater Impact
  • Media

Retail Out-Of-Home In Combination With Television Delivers Greater Impact

Shopper Media today released findings from its latest ‘Media Multiplier Effect’ Shopper Study, confirming that using retail OOH in conjunction with television advertising will deliver greater efficiencies for brand and product campaigns. Jamie Hollebone, Shopper Media’s Head of Revenue (pictured), says, “The findings indicate that a combination spend on TVC and retail OOH will boost […]