Australia analysis: SVoD investments drive local success

In new research from Ampere Analysis, the Australian market for subscription video on demand (SVoD) comes under the spotlight. SVoD is extremely popular here and has made significant inroads, while pay TV service growth has stalled.

Netflix is by far the most popular service with Australian Internet users, despite gripes from subscribers about having access to fewer titles than their US counterparts. In fact, Australia is one of Netflix’s strongest markets in terms of the size of its catalogue, being beaten on the number of titles on offer by just a handful of other markets (the US, UK, Canada, Japan and key Latin American territories). And Netflix has been investing heavily in Australia.

While the SVoD market leader has been honing its offer in the US, reducing the number of titles on offer, in Australia the reverse has been occurring. The amount of content on Netflix’s service in Australia has nearly tripled in volume over the last two years, by Ampere’s estimates – with over 22,000 hours of film and TV now available. The range on offer has worked to attract older consumers alongside the young. Netflix has one of the most mature customer bases in the Australian SVoD market with a balanced gender mix, and better performance among older consumer groups than many of its rivals.

Ampere’s proprietary analysis highlights how the services differ in their content and genre composition and audience:
• Netflix has the largest Australian catalogue with almost 5000 distinct titles (compared to approximately 6000 in the US). Next are Amazon Prime Video and Foxtel Now with around 3,000 titles each. Stan offers just over 2,000 titles.
• On average, Stan's and Foxtel Now’s titles score higher on the Ampere Quality Rating Index - at 72/100 apiece. Netflix’s catalogue scores 69/100 and Amazon Prime Video rates at 66/100.
• Both Stan and Amazon Prime Video have older catalogues, with an average first release year of 2005, compared to Netflix's 2010 and Foxtel's 2009.
• The ratio of TV season and movie titles varies by platform. Foxtel Now’s catalogue has more of a focus on TV (56% of titles). In comparison, TV represents a smaller proportion of the catalogues of Netflix and Stan (40% of titles). Amazon Prime Video’s TV titles equate to just 24% of its catalogue.
• There are significant differences between genre composition across the platforms. Documentary & Biography makes up only 6% of Stan’s catalogue, but represents approximately 20% of the catalogues of Amazon Prime Video, Netflix and Foxtel Now. Foxtel Now also has a higher proportion of Reality (7%) and Lifestyle (6%) titles than the other platforms.

Netflix and Stan enjoy a balanced audience of male and female viewers, while Amazon, and YouTube Red are heavily skewed to a male audience (73% and 72% respectively). Newcomer Amazon has been successful at attracting 25 to 34-year olds, who account for 40% of its audience. Netflix however, has an older-skewing customer base than other SVoD providers. Just 30% of its customers are aged 25-34, the smallest proportion of any of the major SVoD players. Netflix’s ability to reach older demographics has been one of the key factors influencing its relative success in Australia – driving an expanded addressable market relative to more millennial-focused services.

Richard Broughton, director at Ampere Analysis, said: “Australia is a competitive market for subscription video-on-demand providers, and has already seen two casualties – Quickflix and Presto - in the ongoing battle for subscribers. Having the deep pockets required to continue to invest in a compelling line-up of titles – and keep pace with Netflix’s steady catalogue growth - is key for the remaining combatants.”