Australia - Video on Demand, Free-to-Air TV, Pay TV and Digital Media

Publication Overview

The  video streaming industry continues to evolve and growing strongly as the market moves towards 2019. Consumer habits are shifting from broadcast TV to on-demand content – especially video streaming. Traditional TV viewing is increasingly facing competition from other viewing platforms such as smart phones and tablets and from the rise of video streaming specialists such as Netflix.

This report offers a wealth of information on the video streaming, Free-to-Air TV, Pay TV and Digital Media markets including:-

  • Development and general trends in regards to the transformation of broadcasting
  • Video streaming overview and analysis;
  • Overview of the Australian pay TV and Free-to-Air TV markets and analysis of the competitive threats;
  • Video streaming major players overview including:  Netflix, Foxtel and Stan.
  • Key developments in the digital media apps and services industry: social media, online shopping, online music, online news, and online gaming.

Researchers:- Phil Harpur
Current publication date:- April 2018 (4th Edition)

Executive Summary

Pay TV and Free-To-Air TV under growing threat from Video-on-Demand

There are two major categories of paid online video content: Pay-per-view video-on-demand (PVOD) and subscription video-on-demand (SVOD) services. SVOD has emerged as the major category of paid online content in Australia.

The global streaming revolution is gathering pace. The Internet now rivals broadcast TV as a vehicle to deliver consumer content. Their shift in user behaviour continues to drive change in the TV and media industries, prompting a move away from old formats and business models and ushering in an era of high-quality, on-demand entertainment.

Streaming is closing in on broadcast TV. A rapid increase in the rate of adoption of SVOD is occurring where high-quality broadband is already available. The NBN is accelerating this trend and as the mass deployment of high quality broadband takes place via it there will be a significant decrease in the cost of SVOD.

Netflix has emerged as the SVOD dominant operator, but both Stan and Presto have built up a significant customer base, and both have the substantial financial resources of their backers at their disposal. With such a large number national and international players competing consolidation is starting to take place. Quickflix has been forced to exit the market, followed by Foxtel’s Presto service later on in the same year.

FOXTEL during the last few years has struggled to increase pay TV penetration in Australia. Viewing habits have also been affected by the advent of catch-up TV services, which are available from the main broadcasters. In addition, subscription video services from VOD operators such as Stan and Netflix are further eroding live TV viewing as subscribers choose instead to watch programs at a time of their choosing.

Also the distribution advantage held by FOXTEL is slipping away as the NBN becomes built out over a greater number of premises, so expanding the reach of capable broadband infrastructure which enables subscribers to access OTT and IPTV content. These changing market conditions are impacting both the FTA and pay TV industries.

The broadcasters have been late entering the market: their focus has been on protecting their traditional business which are under threat from declining revenues, rather than establishing a strong foothold in the SVOD market.

Amongst the existing pay TV and free-to-air subscriptions there will be increased pressure on profitability as competition for content pushes up the cost of licensing.

Key Developments

  • Netflix has emerged as the SVOD dominant operator, but both Stan and Presto have built up a significant customer base.
  • FOXTEL during the last few years has struggled to increase pay TV penetration in Australia.
  • The rate of SVOD growth moving into 2019 will begin to taper off and eventually level off in around five years’ time in 2023.

Key companies mentioned in this report:

Telstra, Optus, FetchTV, Bigpond, Google, Apple, ABC, Netflix, Foxtel, NBN Co, Hulu, Stan, AUSTAR, FOXTEL, TransACT, SelecTV, Telstra, TV Plus, Presto TV, Stan, Australian Broadcasting Corporation (ABC), Special Broadcasting Service (SBS), Seven West, Nine Entertainment, TEN, Free TV.

Table of Contents

  • 1. Video streaming market
    • 1.1 Market Analysis
    • 1.2 Definitions
    • 1.3 Impact of SVOD on traditional TV
      • 1.3.1 Overview
      • 1.3.2 Catch-up TV
      • 1.3.3 Opportunities for Broadcasters
    • 1.4 Impact of SVOD on the Pay TV Market
    • 1.5 VOD Subscribers and Usage Statistics
      • 1.5.1 2018 Statistics
      • 1.5.2 2017 Statistics
      • 1.5.3 2016 Statistics
      • 1.5.4 Subscribers and Pricing by Provider
      • 1.5.5 Forecasts and Future Trends
    • 1.6 Inhibitors to SVOD Market Growth
      • 1.6.1 Introduction
      • 1.6.2 Restricted bandwidth / Access Speed
      • 1.6.3 Lack of Differentiation of Product Offerings
      • 1.6.4 Copyright and content issues
    • 1.7 Major VOD Providers
      • 1.7.1 Netflix
      • 1.7.2 Stan
      • 1.7.3 Foxtel
      • 1.7.4 Telstra TV
      • 1.7.5 Vodafone
      • 1.7.6 FetchTV
      • 1.7.7 Hayu
      • 1.7.8 Hulu
    • 1.8 Global Trends
      • 1.8.1 Lack of success of telcos Globally
      • 1.8.2 Rise of SVOD has accelerated uptake of video
    • 1.9 SVOD Market Trends
      • 1.9.1 Growing Market Competition
      • 1.9.2 Consolidation of Australian SVOD Market
      • 1.9.3 Impact of SVOD on Telco Market
      • 1.9.4 Competition from Second Tier Market
    • 1.10 Market Analysis
      • 1.10.1 The remarkable story of Fetch
      • 1.10.2 Rapid recent uptake in SVOD in Australia
      • 1.10.3 Is the IPTV market ready for consolidation?
    • 1.11 Other Market Research Studies and surveys
      • 1.11.1 SVOD Market Forecast
      • 1.11.2 Multi-Screen Market Study show broadcast TV viewing in on the decline
      • 1.11.3 Programmatic Advertising Market Trends
      • 1.11.4 VOD sport viewing Patterns
  • 2. Pay TV market
    • 2.1 Subscriber statistics
    • 2.2 Consumer penetration statistics
    • 2.3 Usage Statistics – 2016 - 2017
    • 2.4 Revenue statistics
    • 2.5 Advertising revenue
    • 2.6 ARPU and Churn Statistics
    • 2.7 Infrastructure statistics and Availability
    • 2.8 Major Players
      • 2.8.1 Market overview
      • 2.8.2 FOXTEL
    • 2.9 Industry and market analysis
      • 2.9.1 Market trends in 2017
  • 3. Free-to-Air TV Market
    • 3.1 Trends and analysis
    • 3.2 Impact of SVOD on traditional TV
    • 3.3 Major FTA Providers
    • 3.4 Usage Statistics – 2017 - 2018
    • 3.5 Usage Statistics – 2015 - 2016
    • 3.6 Advertising market statistics
  • 4. Digital Media - Apps and Services
    • 4.1 Mobile internet advertising
      • 4.1.1 Background
      • 4.1.2 Mobile ads in exchange for discounts
    • 4.2 Over-The-Top (OTT) Communication Tools
    • 4.3 General Usage Trends
    • 4.4 App Usage Trends
    • 4.5 The rise of the Access Economy
    • 4.6 Key Social Network Providers
      • 4.6.1 Statistics
      • 4.6.2 Facebook
      • 4.6.3 LinkedIn
      • 4.6.4 Twitter
      • 4.6.5 Instagram
    • 4.7 Social Networks – Global Trends
      • 4.7.1 Adult services
      • 4.7.2 Online dating
    • 4.8 Social Media Trends – Consumer Segment
      • 4.8.1 Usage Trends – 2017
      • 4.8.2 Sensis Social Media Report 2016
      • 4.8.3 Sensis Social Media Report 2015
    • 4.9 Social Network Trends – Business Segment
    • 4.10 Video Game Market - Industry developments
      • 4.10.1 Industry review 2015 – 2016
      • 4.10.2 The Video Game market in 2016
      • 4.10.3 The Video Game market in 2015
      • 4.10.4 Game classification
      • 4.10.5 Gaming targeted by DDoS attacks
    • 4.11 Online Shopping
    • 4.12 Online Music
    • 4.13 Online News
    • 4.14 Video Game Market surveys
      • 4.14.1 Statistical Overview of the Market
    • 4.15 Mobile gaming
      • 4.15.1 Mobile gaming
      • 4.15.2 Global trends
      • 4.15.3 Tabcorp betting via mobile devices
    • 4.16 Online gambling
      • 4.16.1 Statistics
      • 4.16.2 Online Sports betting - 2015
      • Table 1 – Total number of Fetch TV subscribers 2012 - 2016
      • Table 2 – Forecast - Television households and subscriptions in Australia – 2014 - 2019
      • Table 3 – Pay TV subscribers, Foxtel, others and total – 2008 - 2017
      • Table 4 – Pay TV subscribers – annual change by major operator – 2008 - 2017
      • Table 5 – Historic - Pay TV subscribers – annual change by major operator– 1997 - 2007
      • Table 6 – Historic – AUSTAR pay TV subscribers – 2008 - 2011
      • Table 7 – Pay TV household penetration rates – 2005 - 2019
      • Table 8 – Historic - Pay TV household penetration rates – 1997 - 2004
      • Table 9 – Historic - Pay TV revenue by major operator – 1997 - 2004
      • Table 10 – Pay TV revenue by major operator – 2005 - 2017
      • Table 11 – Historic - Percentage change of pay TV revenue by major operator – 1998 - 2004
      • Table 12 – Percentage change of pay TV revenue by major operator – 2005 - 2017
      • Table 13 – Subscription TV advertising revenue and annual change – 2000 - 2017
      • Table 14 –ARPU levels per operator AUSTAR versus FOXTEL – 2003 - 2017
      • Table 15 – Pay TV industry annual churn rates – 1996 - 2017
      • Table 16 – Total FOXTEL and wholesale subscribers – 2012 - 2017
      • Table 17 – Historic - FOXTEL and wholesale subscribers by annual change – 2012 - 2014
      • Table 18 – Historic - Subscriber annual churn rate – 2002 - 2014
      • Table 19 – Historic – FOXTEL and wholesale subscribers – 2002 - 2011
      • Table 20 – Historic – FOXTEL and wholesale subscribers by annual change – 2003 - 2011
      • Table 21 – Historic – FOXTEL subscribers by type – 2008 - 2011
      • Table 22 – FOXTEL – Key Financial Indicators Revenue ($million) – 2015 - 2017
      • Table 23 – Historic - FOXTEL – Key Financial Indicators – 2014 - 2015
      • Table 24 – Historic - FOXTEL – Revenue and Net Income – 2012 - 2015
      • Table 25 – Historic - FOXTEL - Revenue and Net Income (US$) – 2012 - 2015
      • Table 26 – FOXTEL monthly ARPU – 2003 - 2016
      • Table 27 – Historic - AUSTAR key operating and financial figures – 2009 - 2012
      • Table 28 – Number of television and radio licences on issue
      • Table 29 – Preferred Entertainment Activities– 2012; 2016
      • Table 30 – Historic - Percentage shares of capital city TV advertising market – 1998 - 2015
      • Table 31 – Historic - Metropolitan advertising revenue for FTA commercial networks – 2009 - 2015
      • Table 32 – Historic - Regional and total advertising revenue for FTA commercial networks – 2009 - 2015
      • Table 33 – OTT Communications Market – 2015 - 2016
      • Table 34 – Communicate by Service, Usage Patterns – 2013; 2017
      • Table 35 – Estimated social networking members by major sites in Australia – 2010 - 2017
      • Table 36 – Social Media Presence by Size of Business - 2016
      • Table 37 – Proportion of SMBs with a social media presence, by industry– 2011 - 2016
      • Table 38 - Traditional vs Digital Sales - 2015
      • Chart 1 – Australians accessing online video content online – 2017
      • Chart 2–SVOD or pay-as-you-go services – June 2017
      • Chart 3 –Devices or services used for streaming video to television – June 2017
      • Chart 4 -Devices uses for Traditional video viewing by device - June 2017
      • Chart 5 - Devices uses for online video viewing by device - June 2017
      • Chart 6 – Online content watched in the last six months - 2017
      • Chart 7 – Online video services used in the last six months - 2017
      • Chart 8 – Catch-up TV services used in the last seven days- 2017
      • Chart 9 - Devices uses for Traditional video viewing by device - June 2017
      • Chart 10 - Devices uses for online video viewing by device - June 2017
      • Chart 11 – Preferred Entertainment Activities– 2012; 2016
      • Chart 12 –Time Spent Watching TV by method of programming – 2016
      • Chart 13 – Communicate by Service, Usage Patterns – 2013; 2017
      • Chart 14 – Activities performed online by Australian internet users – 2017
      • Chart 15 –Use of communications apps, by activity – 2017
      • Chart 16 – Social Networks Actively Used - 2016
      • Chart 17 – Social Networking Sites Used - 2016
      • Chart 18 –Social Media usage by age – June 2017
      • Chart 19 –Top 10 Communications Apps Used – June 2017
      • Chart 20 – Proportion of businesses that have a social media presence - 2016
      • Chart 21 – Social Media Presence by Size of Business - 2016
      • Chart 22 – Proportion of businesses that have removed social media presence in last year- 2016
      • Chart 23 – Proportion of businesses that intend to get a social media presence in next year- 2016
      • Chart 24 – Proportion of SMBs with a social media presence, total – 2011 - 2016
      • Chart 25 – Proportion of Businesses that Advertise on each Channel - 2016
      • Chart 26 – Proportion of Businesses that found paying to advertise on a Social Media Channel Effective - 2016
      • Chart 27 – Preferred Entertainment Activities – Playing Video Games on any Device
      • Chart 28 – Preferred Entertainment Activities– 2012; 2016
      • Chart 29 – Online shopping 2014- 2017
      • Chart 30 – Most important influences on buying decisions – 2013; 2016
      • Chart 31 – Attitudes Towards Online Advertising - 2016
      • Chart 32– Music Streaming Services Used (in last seven days)
      • Chart 33 – News brands used via online platforms in the last seven days - 2017
      • Exhibit 1 – Pay TV rollouts by state
      • Exhibit 2 – Overview of new media activities from pay TV operators
      • Exhibit 3 – FOXTEL at a glance
      • Exhibit 4 – AUSTAR brief company history – 1994 - 2012
      • Exhibit 5 – Listing of major commercial television licences by Network ID and affiliation
      • Exhibit 6 – Examples of popular online dating sites

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Technologies

Broadcasting
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Regulations & Government Policies
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Number of pages 111

Status Current

Last updated 26 Apr 2018
Update History

Analyst: Phil Harpur

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