The launch of another subscription video-on-demand (sVOD) service, Netflix, in the Australian market could have a large impact on Foxtel. The success of these sVOD services relies on the convenience of the service and delivering high quality TV content. Netflix (US) and Stan have stronger awareness and interest than their sVOD rivals, according to a survey released today by Venture Consulting.
Around 250,000 Foxtel subscribers are at risk of downgrading or cancelling their service
35% of Foxtel’s subscriber base have said that they are considering subscribing to an sVOD service over the next three months.
34% of these have stated they will either cancel or downgrade their service on subscribing to sVOD. This equates to around 250,000 Foxtel subscribers.
TV content is the key driver of subscription for sVOD subscriptions
Access to a wide range of quality content and convenience are the two main reasons why consumers would consider subscribing to any sVOD service .
TV content is nearly twice as important as movies – 58% of users/considerers subscribe for TV content compared to 30% for movies.
TV content is particularly strong for females.
This also partly explains the stronger interest in Stan (20% of interest amongst all those considering sVOD services) which predominantly has more TV content, as opposed to Presto (7% of interest amongst sVOD considerers) whose content library is largely made up of movies.
Interest in sVOD is high – Netflix (US) and Stan have the strongest awareness and interest of all sVOD services
The sVOD market is still relatively nascent, but awareness is growing very quickly
Around a month following launch, Stan already had 25% awareness among online Australians
Netflix (US service) had 32% awareness even before commencing any marketing in the Australian market
Once aware of the service, Stan and Netflix have the strongest appeal to consumers (of those aware of Stan, 28% are considering subscribing in the next 3 months).
According to Phil Codrington, report author and senior manager, Venture Consulting, “Foxtel has a lot at stake with around 250,000 subscribers at risk of downgrading their package or leaving Foxtel altogether in response to SVOD competition. Foxtel have a fine balancing act between playing in the SVOD market and managing the cannibalisation of its core revenue base.”