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Growth of SVOD services like Netflix and Stan has exploded in Australia


Demand for Subscription Video on Demand (SVOD) services in Australia like Netflix and Stan is continuing to grow at a rapid pace in Australia with more than 9.1 million subscriptions.

According to analyst firm Telsyte, the adoption of SVOD up until the end of June 2018 has grown by 54 per cent year on year.

And revenue has grown at a substantially higher at up to 90 per cent, reaching more than $700m at the end of the 2018 financial year.

Telsyte forecasts that pace of growth will continue with 22 million SVOD subscriptions expected by 2022.

Streaming our entertainment through our internet-connected devices like our smartphones, smart TVs, set-top-boxes and gaming consoles has become the new normal for Australian viewers.

An estimated 43 per cent of Australian households subscribed to SVOD services by the end of June 2018 which is a 30 per cent increase on last year.

But, according to Telsyte, we’re still behind the US and UK adoption levels which is 70 per cent and 60 per cent respectively.

SVOD is also putting pressure on traditional Pay TV which is still in one-third of Australian households – the same level as 2017.

It’s only the growth of Fetch TV, which is both a SVOD and pay TV service through its set-top boxes, which has offset the decline of Foxtel subscriptions.

Netflix is the most popular SVOD service with 3.9 million subscribers with Stan second with about a million subscribers.

New players in the market like Amazon Prime and Foxtel Now are also growing thanks to their offerings of special interest programs and sport.

And other SVOD services may also be on the horizon with the possibility of a Disney and HBO entering the Australian market in the near future.

Australian viewers may also be able to access services from major sporting bodies like the National Football League, Major League Baseball and the National Basketball Association.

And it’s not a case of “winner takes all” in the SVOD market.

“Consumer are becoming comfortable with multiple subscriptions and are subscribing to different providers for exclusive content and live sports” said Telsyte managing director Foad Fadaghi.

Telsyte’s research shows Australians are comfortable with subscription-based entertainment services with millions of customers already to subscribed to music services like Spotify and Apple Music and gaming services like PlayStation Plus and Xbox Live Gold.

A real driver in the growth of SVOD is our faster internet connections and unlimited data offerings from Internet Service Providers (ISP) and as a result we are able to stream high quality 4K HDR (high dynamic range) content.

4K TVs can already be found in 15 per cent of Australian homes with penetration expected to hit 50 per cent by 2022.