With the Australian launch of Netflix yesterday some experts have questioned whether all the players in the video streaming game can survive if they’re charging less than $10 a month for a subscription.
Ben Lilley, CEO of McCann Worldgroup, also argued for most consumers it’ll probably add-up to a lot more than $10 a month. He said due to their limited program offerings, consumers will probably need to subscribe to more than one platform. Add in the cost of the broadband fees and maybe a Foxtel subscription and the average household is going to be paying much, much more than nine or 10 dollars being advertised.
Lilley, too, was confident that free-to-air would continue its dominance with viewers and remain the number one option for advertisers. “The truth is free-to-air is still very compelling for the vast majority of Australians, plus all their digital channels as well,” he told B&T.
Lilley added it was still way too early to assess the impact Netflix and the like may have on Seven’s, Nine’s and Ten’s audience numbers.
Another agency head, who spoke to B&T on the guarantee of anonymity, agreed free-to-air would remain “king for a long time to come”.
“It remains the best value for money and best for reach (for advertisers) and I can’t see that changing any time soon. My personal opinion is these streaming services may struggle in a very crowded market competing for a limited number of eyeballs,” he said.
Lilley also believed that “TV junkies” were probably already downloading Stan’s, Presto’s and Netflix’s exclusive offerings for free anyway.
“Until a content provider comes to the market with this genuine, broad, deep range of programming options they’re (the video streamers) are really only going to be nibbling at the edges from what is still a very, very strong free-to-air option,” Lilley said.
Lilley said he’d not seen or heard concerns from clients about these new players – who are ad-free – having an impact on free-to-air viewer numbers.
“The concerns for most mass marketers actually started a long time ago with the way all these digital and internet options popping up,” he said. “They’ve already had to rethink, re-work their media strategies to be able to work around the decline in free-to-air audiences. Broadband has just opened up a whole new playing field and that’s why we’ve seen such a plethora of options come onto the market.
“Foxtel was probably the original disruptor here, but look at the trouble these new channels are causing it. Foxtel is a really old technology and they’ve had to slowly evolve their technology and it’s only now, with their launch of Presto, that they have a viable competitor to Netflix and Stan and the others.
“I really think with the size of the market in Australia there really is only room for a couple of players and it will really be a race to achieve the scale required as quickly as possible. Are these streaming services going to be able to survive offering free trial periods and charging nine bucks a month? I don’t know,” Lilley questioned.
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