The latest Telsyte Australian Entertainment Subscriptions Study 2020 reveals that subscription services are booming across Australia, driven by streaming video on demand (SVOD) subscriptions and gaming subscriptions like Xbox Gamepass.
As shown in the next chart, total subscriptions rose by 5.6 million (17.9%) in the year to June 2020, led by a 3.9 million increase in SVOD subscriptions (+31.5%) and a 1.6 million increase in gaming subscriptions (+38.1%):
By contrast, traditional Pay TV subscriptions (mainly Foxtel) fell by 0.2 million (-6%) in the year to June 2020.
According to Telsyte:
The total Pay TV market (which includes residential cable, satellite and IPTV) was down 6 per cent year on year to 2.6 million subscriptions at the end of June 2020.
Foxtel’s Pay TV was the main source of the market decline due to increasing adoption of SVOD, which itself is now pivoting strongly towards with Foxtel Now, Kayo Sport and Binge.
The total number of subscriptions is forecast by Telsyte to grow to 58 million by 2024, a further increase of 57.6%.
The best that Foxtel can hope for is to replace falling subscriptions in traditional broadcast cable with online SVOD offerings like Kayo, Foxtel Now and Binge.
However, doing so will involve shredding its profit margins, since Foxtel’s online SVOD services typically do not contain ads and are priced well below Foxtel’s traditional cable offering.