How Netflix sets the scene for subscription TV competition

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Growth in Netflix has powered the adoption of pay and subscription TV in Australia, paving the way for the arrival of Disney+ and Apple+.

Research by Roy Morgan shows more than 14.5 million Australians (69 per cent) now have access to some sort of pay/subscription TV, with Netflix's 11.9 million accounting for 57 per cent of the population.

The 'haves' overtook the 'have-nots' in mid-2016, when pay/subscription numbers reached ten million. Overall, access to some form of pay/subscription TV is up 8.2 per cent on a year ago.

Nine-owned Stan is the leading Australian-owned subscription TV service, having grown 60.5 per cent to be accessible by more than 3.3 million Australians.

Meanwhile, Foxtel looks flat with growth of only 1.5 per cent (to 5.2 million) in the year to October, its 25 per cent reach less than half of that of Netflix, and takes into account that Foxtel subscribers have had access to Netflix through the Foxtel IQ box since July. Consolation for the News-owned units is its Kayo Sports streaming service, which has found an audience of 770,000 in the year since it launched.

Roy Morgan chief executive Michele Levine says the growth in subscription TV has been extraordinary, with Netflix' success attracted many other competitors to the market, including locally-owned Stan and cashed-up international rivals such as YouTube Premium and Amazon Prime Video.

"What we're finding is that people are not choosing one or the other, they are having multiple streaming services," she says.

New entrants Apple TV+ and Disney+ "are sure to provide intense competition for existing services. If Disney can bundle its content with a really good delivery service it will be a major competitor."

For the more than 6.4 million without pay/subscription TV - nearly a third of the population - she says free-to-air TV remains relevant, although it faces "enormous pressure".

• A separate Roy Morgan survey has Netflix topping their 'Kids' Cool List' ahead of Apple's iPad and Sony's Playstation 4 (boys) or iPhone (girls). Two thirds of respondents put Netflix at the top of their list.

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DIGITAL | TV, VOD, PODCASTS & AUDIO
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