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

New Talent Agency, Liquorice Plants Roots In NZ
  • Marketing
  • Media

New Talent Agency, Liquorice Plants Roots In NZ

The brainchild of co-founders Gina Williams-Folau (main photo) and Greer Bland, the talent agency Liquorice was born out of a desire to make things easier for brand managers. Liquorice offers social talent for brands wanting to hit the sweet spot with Kiwi audiences. Launching with a roster of big names on board including Millie Elder-Holmes, Athena […]

Anglicare WA Makes Winter Chill Contagious In Campaign Via Wunderman Thompson
  • Advertising
  • Campaigns

Anglicare WA Makes Winter Chill Contagious In Campaign Via Wunderman Thompson

9000 Western Australians experiencing homelessness are about to face cold winter nights. To call for donations to the 2021 Winter Appeal, Anglicare WA has released a chilling video with renowned actor Liam Graham, best known for his starring roles in Greenfield and The Heights, experiencing mild hypothermia after spending one hour in a commercial freezer. […]

Blackmagic Design Helps Create Latest Ad For Chris Hemsworth’s Centr Fitness App
  • Advertising

Blackmagic Design Helps Create Latest Ad For Chris Hemsworth’s Centr Fitness App

Blackmagic Design has shared how its products were used to shoot the latest commercial campaign for Chris Hemsworth’s fitness training app, Centr. The new campaign, which promotes the progressive 10 week workout plan ‘Power’ replicates the same protocols used to prepare the actor for his latest appearance in the upcoming Marvel franchise film, Thor: Love […]

Webprofits To Aggressively Drive Airtasker’s UK Growth Plan
  • Marketing

Webprofits To Aggressively Drive Airtasker’s UK Growth Plan

Airtasker has chosen leading independent digital growth consultancy, Webprofits as a strategic partner to help them expand to new markets. Following a successful IPO in early 2021, Airtasker set its sights on the next strategic objective — expansion and growth in the UK market. After careful review, they partnered with the growth marketing specialists at […]

Cresta’s Awards See Upturn As Ad Spend Starts To Return
  • Advertising

Cresta’s Awards See Upturn As Ad Spend Starts To Return

Cresta Awards has announced that despite having a few more weeks before entries close, this year’s Cresta Awards has surpassed its entries for the whole 2019 Season. Cresta sees this as evidence, not just of evolution in its own awards but of a wider measure of industry confidence and resilience in many markets. The awards […]

Seattle, USA - Aug 19, 2019: The new Google building in the south lake union area at twilight.
  • Technology

Reports: Google Draws The Ire Of EU (Again)

B&T's editor takes great pleasure in an opportunity to use 'ire' in a headline, despite having no idea what it means.

by B&T Magazine

B&T Magazine