Incumbent TV safe from SVOD boom in Oz

Staff writer
14 Dec 2015
00:00

Australian subscriptions to streaming video on demand (SVOD) services like Netflix, Presto and Stan will grow 17fold between the end of 2014 and the end of 2019, according to new forecasts by Ovum.

“SVOD services have been growing rapidly in Australia since the entry of Netflix in May this year,” said David Kennedy, research director at Ovum.

“This has sparked strong competition from the Australian incumbents — the free-to-air and pay TV industries — that is driving takeup,” said Kennedy.

Ovum forecasts show that SVOD subscriptions will rise from only 270,000 in December 2014 to hit 4.7 million by the end of 2019.

However, Ovum does not expect cannibalization of the existing pay TV or free-to-air subscriptions, though there will be pressure on profitability as competition for content pushes up the cost of licensing.

“SVOD, pay TV and free-to-air are distinct consumer propositions that meet different needs,” said Kennedy.

“We expect SVOD to grow fast, but we also expect pay TV to maintain its dominance of sport and for free-to-air to remain popular because, well, it’s free,” he added. “Consumers will mix and match these different services.”

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