As the dust settles on another Olympics, the attention now turns to what’s next for the local media industry.
After 7plus posted record streaming numbers during the Tokyo Games, Australians can now expect more digital video options, with Paramount+ officially launching in Australia today.
Paramount+ comes into the local market as a rebrand of what was once 10 All Access, but as 10 ViacomCBS’s chief Sales Officer Rod Prosser recently told B&T, it will put the instinctively recognisable Paramount brand right in front of Australians.
With a host of top Paramount picks, original content and a smattering of live sport thanks to a $300 million broadcast deal between 10 ViacomCBS and Football Australia, Paramount+ is launching as a product ready-made for the Australian market.
But it is also launching into a streaming market that is increasingly crowded.
Canstar recently found that the average Australian household is spending $42 per month on streaming services.
At $8.99 per month or $89.99 annually, Paramount+ is slightly cheaper than Netflix ($10.99 per month for a basic subscription), Stan ($10 a month for basic subscription $10 a month to add Stan Sport), Binge ($10 per month for a basic subscription), Kayo ($25 a month for basic subscription) and Disney+ ($11.99 per month)
Only Amazon Prime ($6.99 a month) and Apple TV+ ($7.99 per month) are more affordable.
It is this pricing edge that 10 ViacomCBS SVP head of streaming Liz Baldwin hopes can encourage Australians to sign up for one more subscription video on demand (SVOD) service.
“Our pricing will be key,” Baldwin told B&T.
“We’re very competitively priced at $8.99 a month, or at $89.99 for a year. We’ve deliberately gone in at a very accessible price point and we think it’s incredible value for money in terms of that price point versus the incredible breadth and depth of content that the service will have.
“We feel pretty confident that when people say what we’ve got that there’ll be a strong uptake.”
An over-crowded market?
Although much has been made about the crowded nature of the SVOD market in Australia (and globally), data suggests there is plenty of subscriber spend to go around.
News Corp revealed last week that Foxtel Now, Binge and Kayo now have over 2 million combined subscribers (with Binge reaching 733,000 subscribers in a little over 12 months), Nine revealed Stan reached the 2 million subscriber mark in August of 2020, while recent reports suggest Netflix now has around 5.4 million subscribers in Australia.
It’s something 10 ViacomCBS’s head of programming Dan Monaghan describes as a local “appetite for streaming”.
“The thirst for content in this market is unparalleled in most markets,” he told B&T.
“We have such a thirst for content – local and overseas content – here that people really will seek out to find the best. And we believe the programs that we have are the best.”
Criteo’s managing director ANZ Colin Barnard told B&T he has been surprised by the continued growth of Australia’s SVOD market.
“In the early days, I thought this might be a bit like classifieds, in that there will be one or two players, and everyone just sticks to those,” he said.
“I’ve been quite surprised by the proliferation of the different platforms.”
Barnard also pointed to the importance of content in keeping consumers interested in signing up for new platforms.
“It’s about the content,” he said. “Obviously with what’s happened in the background with mergers of the different media properties, Paramount+ has access to a ton of really good quality content.”
He also applauded Stan’s efforts in advertising its content offering and suggested Paramount+ would have to do the same in order to enjoy the same success.
Finding savings
Although many households around Australia might happily pay the average of $42 per month to access their favourite content, there is risk that consumers will start to drop off as this fee creeps higher.
To manage this, Barnard said he expects we might see consumers start adding and cancelling their subscriptions more frequently, in order to access content when they want it.
“You’re going to start having people peel off and say: ‘I’ll cap my budget and pay $30 a month for one or two of these, and then I’ll dip into these other services either for free trials or the ones that are ad-supported’.
“I think we underestimate the savviness of consumers. Even though a lot of us are quite lazy in not cancelling stuff, when it starts to hit your monthly budget at that sort of level, then I think you can see some stuff dropping off.”
Ad-supported models
If consumers are to start limiting their monthly expenditure on streaming services, there is a clear business case for ad supported services.
Catchup services such as 9Now, 10play, SBS On Demand and 7Plus have each demonstrated an appetite for ad-supported content in Australia.
Just this week 7Plus revealed it now has 9.2 million registered accounts, after experiencing a 44 per cent increase during the Tokyo Olympics.
Globally, the face of ad-supported streaming services is Tubi, which was acquired by Fox Corp last year.
Tubi, which is now available in Australia, bills itself as the perfect add-on to your Netflix, Stan and Amazon Prime subscription – free of charge and hours of content.
In Fox’s most recent quarterly earnings, Fox Corp’s CEO Lachlan Murdoch revealed the Tubi acquisition had bolstered the company’s wider advertising business on the back of 900 million hours of watch time.
The ability to target viewers with programmatic ads created “a very high rate”, explained Murdoch.
He also said: “We have no interest or plans to invest in high-cost programming to acquire subscribers.”
According to Barnard, the Tubi business model is one that we can expect to see more of.
“There is a higher much higher tolerance for ad-supported models than people might think,” he said.
“From the consumer point of view, if you’ve got enough content and you cancel your Amazon Prime subscription or Netflix subscription, and you’re either a lighter TV viewer, or you’re less interested in what’s being offered on the platform you’re subscribed to, then you might be tempted onto one of those other platforms,”
The ability to serve targeted ads also creates an ecosystem where the consumers, streaming services and advertiser each benefit.
“There’s a win-win-win out of all of this,” Barnard said.
“Users get ads that are more relevant to them, so they’ll be more tolerant.
“It creates ads that are relevant for the advertiser to bother to spend money on, which brings in higher CPMs, which means the platform gets more money to then invest in more and better content.”
With Kathleen Farmilo
