Streaming video, music and gaming services saw a drop in annual growth in the past year as cost of living pressures take hold in Australia according analyst firm Telsyte.
The Telsyte Australian Subscription Entertainment Study 2023 revealed the number of subscription services in Australia grew by 3 per cent to 49.9 million as of June 2023 but the growth rate was lower than the double digit increase of the previous year.
But Australians are still quite attached to their on-demand services with Netflix continuing to be the market leader with 6.1 million subscribers in Australia as of June 2023 followed by Amazon Prime Video (4.5 million), Disney+ (3.1 million), Stan (2.6 million), Binge (1.5 million), Paramount+ (1.5 million), Kayo Sports (1.4 million) and Apple TV+ (1 million).
While the growth has declined, Australians are still avidly consuming SVOD (subscription video on demand) with 55 per cent discovering new content through their services.
Average weekly video consumption dipped by 9 per cent year on year to 45 hours but SVOD consumption was one of only two categories that increased across nine video categories measured by Telsyte.
Nearly half (47 per cent) of subscribers said they would switch between services to save money with 27 per cent finding it too hard to unsubscribe even if they are not using them often.
“Profits, partnerships, and more aggressive behaviour. There’s going to be increasing competition to win people over from other platforms,” Telsyte Managing Director, Foad Fadaghi, says.
Telsyte says SVOD subscription could exceed 30 million by June 2027 thanks to new content, growth in multiple subscriptions, new market entrants and more ad supported services.
SVOD market revenue grew to $2.7bn in 2023 – that’s a 14 per cent year-on-year increase because of the rising subscription costs and in-service adoption.
SVOD ranked sixth among segment where customers would be willing to cut back to ease their household budget.
The top three were dining out and takeaway, clothing and accessories and holiday-related expenses.
Above SVOD cutbacks were also alcohol and electronics and gadgets.
“Paid SVOD services as a category exhibits strong retention and near recession-proof characteristics, as other significant spending areas become household budgeting priorities,” says Fadaghi.
This year Netflix started a crackdown on password sharing with 32 per cent sharing their services and half of those are with people who live outside their household.
About 7 per cent of Netflix subscribers cancelled their accounts in the last 12 months because of the crackdown.
At the time of the survey the number of new Netflix members was yet to exceed those exiting the service.
Gaming subscription saw a 2 per cent increase over last year – this is a slower growth rate that can be put down to the rising cost of living.
Music streaming services still remain popular with subscriptions hitting 16.6 million by the end of June 2023 – an increase of 5 per cent from a year ago.