Australia SVoD Saturation Set to Exceed Pay-TV Saturation by End of 2018

Video Entertainment Market Research, Analysis and Commentary

Consumer spend on video entertainment in Australia is expected to grow 3% in 2019 to AU $5.3 billion, according to the latest video entertainment report from Futuresource Consulting. This growth is to be helped by an uplift at the box office and with SVoD uptake continuing to impress. By the end of 2018, Australia is set to be the first country to see the number of SVoD households overtake those of Pay-TV in any market worldwide.

“Pay-TV subscription revenue plays a key role in the strength and size of the overall video market, representing half of total video spend”, comments Joanna Wright, Senior Market Analyst at Futuresource Consulting. “Australia has one of the highest Pay-TV ARPUs (Average Revenue per User) in the world, but the rise of low-cost Pay-TV-Lite and SVoD services has led to more promotions and a fall in the ARPUs.” ARPUs fell in Australia from AU $88 in 2014 to AU $65 in 2018, prompting a 7% fall in overall Pay-TV revenue in 2017 and a further 4% drop anticipated in 2018 to AU $ 2.6 billion. Longer term, revenues are expected to decline on average by 2% each year, but still outperforming SVoD. Futuresource’s consumer research survey, Living with Digital, shows that Pay-TV and SVoD services are complementary, with 65% of Pay-TV subscribers also taking an SVoD subscription.

The digital video landscape continues to be dominated by the uptake of SVoD; it is expected to reach 6.1 million subscriptions by the end of 2018. SVoD saturation’s impressive growth has continued for the last 4 years, largely fuelled by Netflix. SVoD spend grew 55% in 2017, with a further 48% expected in 2018, to reach AU $647 million, which will account for nearly half of all home video spend in Australia.

“Netflix continues to witness a rapid rise in Australia and is undoubtedly one of its most successful international markets. In 2017, it reached a landmark 2.8 million subscriptions, matching Foxtel’s subscriptions, the leading Pay-TV operator,” adds Wright. “Stan and Foxtel Now are witnessing healthy growth in the SVoD sector, but have yet to take-off in the same way as Netflix.”

Following the launch of its e-commerce platform in December 2017 in Australia, Amazon began promoting its Prime service in June 2018. Further competition is due to arrive, with CBS expected to launch All Access by the end of 2018, and Disney also expected to join the category in 2019.

Futuresource's Video Insights Series covers over 20 countries worldwide. Each report reviews the overall video entertainment market, assessing the impactors and drivers as the sector transitions to digital. Key areas of coverage include: Packaged home video; DVD & Blu-ray (sell-through and rental); Pay-TV VoD; Online Video; Electronic sell-through; iVoD and subscription online video; Subscription Pay-TV and Box office. 

For more details about Futuresource's Media & Entertainment Reports, please visit our reports portal here>>

About the author

Joanna Wright

^{Joanna is a senior market analyst with 15 years’ experience, working at Futuresource since 2005. Following seven years in the imaging division, Joanna joined the Entertainment Content Delivery team and is closely involved in researching, analysing and consulting on key content industry developments worldwide, with a particular focus on the digital distribution of entertainment content. Joanna graduated from the University of Bath with a BA in European Studies specialising in French and Italian.}