As Netflix rises, Foxtel falls

By Leith van Onselen

Online streaming services Netflix and Stan have seen their subscriber base lift while Foxtel’s has fallen, according to Roy Morgan Research:

Subscription Video On Demand (SVOD) juggernaut Netflix has continued its impressive growth over the last year with over 9.8 million Australians in the June 2018 quarter now having a Netflix subscription in their household – up nearly 30% on a year ago…

Now over 13 million Australians have access to some form of Pay TV/Subscription TV, up 11.7% on a year ago, and it’s not just Netflix driving the increase.

Over 2 million Australians can now view content via Stan, up 39.2% on a year ago, and growing at a faster rate than Netflix over the last year. Stan is set to be fully owned by the Nine Entertainment Company following their merger with Fairfax…

There were other big increases including for the rebranded YouTube Premium (formerly YouTube Red), now with over 1 million users, up 38.5% on a year ago. While the biggest percentage increases were for Fetch, up 40.5% to 710,000 users and Amazon Prime Video, up 87.7% to 273,000 users…

However, Foxtel disputes Roy Morgan’s numbers:

“It is difficult to understand why Roy Morgan would use survey techniques to determine Foxtel’s subscriber numbers, when the true and reported numbers are publicly available and sit at 2.8 million, well above their estimate.

“This, combined with OzTam’s most recent Establishment Survey, puts the number of Australian’s living in a household with a Foxtel subscription at more than 7.7 million individuals”.

Regardless, Foxtel has well and truly lost its monopoly grip of the pay TV space, and now is in the fight of its life to hold on to its subscriber base, with consumers the big winners.

Viva la competition.

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Leith van Onselen
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Comments

  1. With Foxtel now losing Champions League coverage along with Europa and WC/Euro qualifying games to (fl)Optus I am forced to dump it. I won’t sign up to any SVOD services. Viva VPN and torrents.

    • Yup, sport must be the only thing keeping foxtel alive. I can’t imagine why anyone would pay for the other crap they cycle through. Lucky for them this country is a sport obsessed one.

  2. macrofishMEMBER

    I am buying foxtel now next year as it has all 3 of the major sports i follow (AFL,Cricket,F1) so its finally worth the price

  3. Good. I’m still thinking Foxtel lobbied against a proper NBN to protect its market. A pox on it.

    • Don’t expect NBN to miraculously fix itself after Foxtel dies though. I mean look at the cars example, still no parallel imports.

      • Plenty of importers still pushin that barrow, can you imagine the hit bmw and Mercedes Australia would take if you could import a European one for European cost? The gouging would hae to stop.

  4. Where is Optus?! Oh that’s right … they completely hashed their attempt at becoming a serious media / entertainment player

  5. The first 3 comments are about sports.

    I can not believe that sports are not streamed online around the world.

    Online streaming would allow you to choose camera angles and turn off the commentary.

    • It’s simple Jacob. How can they pay the sports stars obscene amounts if they don’t sell the rights for more than they are worth to pay tv, who then force you to package a whole heap of other crap with it, to help subsidise the excessive cost paid in the first place.
      Online streaming would completely destroy the business model.

    • macrofishMEMBER

      Lack of using caching and CDN make live streaming difficult without being a big boy (amazon/google).

  6. Now you know why Telstra always had bad service when it came to streaming. It was well known that they did not want to loose market share in Foxtel.

  7. This space looks a lot like airlines to me now. NFLX is basically a zero unless they can (a) control content costs (b) find some other way to make money; or (c) get acquired. Have fun on (a) – chances of that happening before they run into serious trouble aren’t great. So yes, consumer wins. My bet is that this is now a space where the whole industry bar those with an ulterior motive for offering VoD e.g. AMZN end up losing.

      • That may help to some degree but it’s just way too competitive, the only edge anyone in this space has is an ability and / or willingness to spend more than the other guy. It has been confused for and priced as if it were a software company. It most definitely is not, but when that perception might change and the reality of their poor economics realised is in my too hard basked. Their accounting is also very aggressive to boot. The marginal return on invested capital in this sector is likely to be poor until you get some sort of wash out and consolidation. Right now things are heading in precisely the opposite direction. The stock levitating because people care about eye balls for a time is a non-issue. If buyers misunderstand the business and get a bit loopy on it / chase blatant speculative momentum then that is their problem to reckon with at some point.

    • Netflix are toast, because there is effectively few barriers to entry and they are losing epic amounts of money. At some point, investors will demand a return and the funding will dry up. Netflix, Amazon, Tesla — all children of the post-GFC money printing glut.

      Netflix’s business model is simple: they are banking on their customers sticking with them when they double/triple the cost of subscriptions. Good luck with that!

      P.S. I am a Netflix subscriber (for now).

      • drsmithyMEMBER

        Few barriers to entry ?

        If you want to have a go in the streaming market you either need rights to stream the material, or you need to produce material yourself.

        The infrastructure and software investment needed is a significant investment as well (the latter in particular since it’s patented up the wazoo).

        I don’t think any of those are low hurdles to get over.

      • Smithy, you must have missed the piece of news the other day that Disney is pulling all their content from Netflix. Just like that.

        Oops!

        (In the meanwhile: Amazon Prime, Disney, Hulu …. talk of Apple muscling in). Other than that, you’re right, I’m sure there’s nothing to worry about).

      • drsmithyMEMBER

        Not quite sure how that really refutes anything I said.

        If you meant “few barriers to entry other than already being a massive media corporation” then, yes, that’s true.

      • Correct. Anyone with money and looking for something to do is free to do it. The dilemma for Netflix is how to monetise all those subscribers. It’s cost a fortune to acquire them, now investors are curious to see how NFLX is going to turn it all into a profit.
        Good luck with that.

  8. Does Foxtel still have wall to wall adverts? It’s like paying 10 bucks for a glossy magazine to only have the first 20 pages being adverts.

  9. Foxtel has some great content, but some of us will never forgive them for their political interference and rent seeking.

  10. Why do Aussies put up with Foxtel, there is so much content now online with Netflix Apple TV etc, you are now the programmer and NO faaaarking adds! Why do you still pay for their crap service and pay them to advertise…! They will go the same way as DVD’s and video recorders, some stalwarts still hanging onto them cause they are either to lazy to jump or dont understand the alternatives. mark my words tho, Foxtel will try and destroy all these guys by leaning on the govt to bring in new hopeless laws to control you…they will lose as you cant stop the evolution that is happening in TV/movie world but not before you lose some more freedom due to the evil and greedy Foxtel.

  11. i miss video rental stores, the average rental outlet had a better selection than netflix does, easily

    • In the early 2000’s I used to work at a Video Shop (Caulfield South)
      http://www.videobusters.com.au/

      It was horrible pay, but I actually enjoyed working there and talking to customers. You’d get to know the locals quite well and build a good rapport with them and their families. Of course I heard every lie under the sun when it came to overdue fees.

      Met some cool people working there too (other staff). All the good movies would get stolen however. Like all the niche Art House / Cult Films, we only ever had 1 copy of.

      So many stoners would come in (Israeli’s) asking for Fear and Loathing in Los Vegas haha. They would come in and go “have you got the fear and the….” and I’d cut them off… Fear and Loathing in Las Vegas, their eyes would light up, like yeah man! I once watched it, had no idea what it was all about (never been a recreational drug taker) and was kind of flabbergasted as to what it was all about. I guess it kind of made more sense on LSD or something.

      Mall Rats
      Clerks
      Eddie Murphy’s Delirious were other favorites that people asked about, but were often missing / stolen. 🙂

      Before Streaming I used to buy old copies of the movies when we were downsizing. I still have all the Austin Powers flicks I bought for cheap off the video shop when they got rid of excess copies..

      I went in there about a year ago, I was surprised they were still in business and my old manager (still there) told me they were struggling bad and had closed every other store. Caulfield South finally pulled the plug and closed earlier this year. I was a little sad to be honest, but the writing was on the wall for them 10 years ago I reckon. I saw every other video store close..

      ha and what do you know someone made a page about it too (just Googling it now), with Jovan my old manager.
      https://talesofbrickandmortar.com/2017/12/04/video-busters-est-1982/

      Makes me a bit Nostalgic.

      • Yes kinda shows how despite ‘social media’ things are less social. Go to a concert these days, it may as well be a stadium of people making low-res low-fi recordings, rather than appreciating the experience.