10 Things You Didn’t Know About SVOD Services in Australia

SVOD

If you didn’t know just how fast subscription video on demand (SVOD) services have been taken up in Australian households you are soon about to. SVOD delivered by the Internet has increased by 46% in a single year between June 2015 and the same month this year. That amounts to 2.7 million Australian households with active subscriptions.

What actually is SVOD?

Good question. It’s one up from renting a hard copy DVD from your local DVD / video shop. Have you noticed how few, if any, there are of these places left now? It’s all because SVOD has taken over. Basically, the idea is that you pay a monthly fee and get to stream as many movies and TV shows as you want. The deals are usually varied so if you pay more you are able to use more than one device at a time.

Who are the main SVOD providers?

There are two main local (Aussie) providers. These are STAN and Presto. They are both doing well, but interloper Netflix has eclipsed them and is currently leading the pack with 1.9 million + individual subscriptions. The big three provide 85% of all SVOD connections in Australia with the other 15% made up of a number of smaller providers that often stream specific content like sports coverage.

How about PayTV?

Pay TV is still healthy in Australia and it is predicted that it will continue to be healthy at least for the next few years. As of mid 2016, there were 3.3 million subscribers to PayTV compared to the 2.7 for SVOD. However, all that might change over the next few years if the breakneck speed at which Australians are taking up SVOD continues to gather pace, SVOD subscriptions may soon eclipse Pay TV. It has been estimated that there will be 4.9 million individual (household) SVOD subscriptions by 2019.

OK, so what are the figures for Netflix, STAN and Presto?

  • Of the 2 locals, STAN is still tops with over 330,000 subscriptions at last count reaching 890,000 Australians.
  • Foxtel’s Presto has just over 140,000 subscriptions reaching 350,000 people.
  • Netflix, which is a U.S. company, now has just under 2 million subscriptions reaching 5 million people across Australia.

Why are people going for SVOD?

There are huge benefits in the service being provided over what there was available before. This might be before your time, but originally, you ether went to the movies at a cinema or, if you were lucky, watched a decent movie on free to air TV. The number of decent movies on free to air TV is now virtually zero while the price of a ticket to the movies has skyrocketed. In came rentals and Pay TV (satellite and cable). SVOD is simply going one better with virtually unlimited streaming guaranteed for rock bottom monthly fees.

How do you know whether you like it?

SVOD providers are typically offering free introductory packages that come with no strings attached. Watch as much content as you like for free and if you don’t like it, don’t continue after the first free month. That’s hard to beat compared to the usual contracts you have to sign up to with Pay TV.

What do you need to use SVOD?

Just about anything. Computers, laptops, smart phones, smart TVs, even a computer lined to a TV. That’s one of the reasons why SVOD is growing so fast. Aussies, like many other people around the world are hooked on streaming, They want to watch what they like whenever they like, whether it’s in the comfort of their own home, while commuting to work on the bus or train, on the beach, or while on holiday in Fiji!

Doesn’t video streaming use a lot of data?

It sure does. To be honest, that’s something which is a limiting factor for subscribers who want to use their mobile devices on a limited data plan. The average movie takes up 1GB of data. Even if a Netflix subscription is only $10 a month, the cost of the data to watch a month’s worth of movies can soon mount up. Of course, not everyone wants to spend all their hard earned cash on watching movies, sport or TV on their mobile device but they’d sure like to if data could become available more readily or more cheaply.

So how much data is being used up by SVOD on mobile devices right now?

A lot of SVOD subscribers typically opt for larger data caps than those who are not subscribers. In fact, addicted streamers are always looking out for the next best data deal and are prepared to switch providers or switch plans when they do find a better deal. The average data cap by an average SVOD subscriber is around 65% greater than a non subscriber according to research done by Telsyte. SVOD is estimated to take up around a third of the data cap available to mobile users. Of course, not all of video watched by consumers is SVOD. In fact, a lot of it is still YouTube.

What are going to be the next tech trends for SVOD?

There has already been a huge uptake of virtual reality headsets and 4K TV sets for video streaming. Research indicates that consumers are prepared to pay more to watch sports, movies and selected TV programs using VR and 4K. Aussies are ditching things as fast as they are taking up new technology. Home phone lines are definitely on the decline as consumers prefer the packages that mobile providers offer. Also, old style boxes like GVA, Humax, Strong, TEAC and Topfield are being junked and there has been a corresponding upsurge in sales of new style boxes that have Netflix capability.

Summary

SVOD, subscription video on demand is growing gangbusters across Australia as consumers are recognising the benefits of being able o watch as many movies and TV programs as they like cheaper than they have ever done before. SVOD is rivalling Pay TV in popularity and may soon outstrip it, although in many cases many people are choosing to complement the different services. Data caps and limited data availability is still going to be an issue for avid movie watchers who want to watch what they want anywhere they like but this might change with the introduction of a 5G network which is in the pipeline in the near future.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.