I wrote on Tuesday how Foxtel has announced that it will offer no contracts and equipment-free packages from December in a bid to attract price-sensitive customers and hold onto market share in the face of stiff competition from on-demand streaming services like Netflix and Stan.
This follows Foxtel already halving the cost of its basic package, and expanding content to its existing customer base, in late-2014 just prior to the launch of Netflix, Stan and Presto.
Now Roy Morgan Research has released a survey showing that Subscription Video on Demand (SVOD) services have overtaken Foxtel’s broadcast Pay TV:
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For the first time, more Australians now have SVOD than linear Pay TV: 5,595,000 people (28%) vs 5,309,000 (27%). The bulk of SVOD’s growth is attributable to Netflix, but other services—Stan, Presto, Quickflix, the recently launched YouTube Red, and Foxtel’s own SVOD option Foxtel Play— can now be found in the homes of around 1.4 million Australians (although, to be fair, over 60% of these subscribers also have Netflix).
Despite the meteoric rise of SVOD since the arrival of Netflix early last year (and to a lesser extent, Stan), the number of people with Foxtel’s linear Pay TV in the home has also risen over the period, by an average of nearly 100,000 per quarter. The reach of IPTV, which includes both Fetch and Foxtel through T-Box, has also increased in the past year despite all the turbulence in the market: 629,000 Australians have IPTV in the home, up around 100,000 since the beginning of the SVOD boom.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
