Home Entertainment Booming Down Under During Pandemic

Add Australia to countries that have driven home entertainment revenue during the COVID-19 pandemic, according to new data from emerging technology analyst firm Telsyte. Aussies added 5.6 million new subscriptions to the end of June, an increase of 18% from a year ago. This growth was across streaming video on demand (SVOD), streaming music and games related subscription services.

The total number of subscriptions reached almost 37 million and is forecast to grow to 58 million by 2024.

The Telsyte Australian Entertainment Subscriptions Study 2020 found SVOD and streaming music remained the top two largest categories with 16 million and 12 million subscriptions respectively.

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Video Entertainment Tops Consumer Demand 

COVID-19 sent the Australian SVOD services market to new heights as Australians spent more time at home, with over half (52%) of SVOD users believing their services have become “essential” since the pandemic. The total number of subscriptions reached around 16.3 million at the end of June 2020, a year-on-year increase of 32% from 12.3 million in June 2019.

Telsyte research shows Netflix (5.4 million) and Stan (2.1 million) remained the top two SVOD service providers at the end of June. Amazon Prime Video and Disney+ (launched in Nov 2019) both emerged strongly with 1.7 and 1.1 million subscriptions, respectively.

Use of Amazon Prime Video benefited from the strong uptake of Prime subscriptions (Telsyte measures a subset of Prime users based on those that use the Prime Video option), as demand for online shopping and delivery has also soared.

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Demand for Live Sports

With Australians, like other countries, unable to attend their favorite sporting matches during the pandemic, the pandemic has only made Aussies’ appetite for sports content even stronger, with a surge in adoption towards the end of June when many sporting codes resumed.

“Despite a hiccup during the shutdown period, sports video subscriptions are set to continue to grow strongly as fans turn to apps instead attending stadiums,” managing director Foad Fadaghi said in a statement.

Telsyte estimates the total sports SVOD category grew by 11% to 4.9 million subs at the end of June. Telstra Sports Live Passes, Optus Sport and Kayo Sports made up around 95% of total sports SVOD subscriptions.

Slowed Content Production

Disruptions to content production during the pandemic will likely present an issue for services going into the second half of 2020, with research showing consumers are recognizing new program additions are in decline.  More than one in three SVOD users feel there is less new content being added to their services since the pandemic.

However, rather than impacting negatively on the market, in the short term Telsyte believes this has driven consumers to consider subscribing to multiple services to address content shortfalls, rather than turning off services.

“Australians continue to show a strong willingness to subscribe to multiple services,” Fadaghi said.

Telsyte research shows that nearly half (47%) of households that subscribe to SVOD services have more than one service, an increase from 41% in June 2019.

The market is well positioned to accommodate multiple providers, as more platforms such as Fetch TV, Apple TV and Foxtel are shaping to be more inclusive, allowing easy subscriptions to multiple services and single billing through the one platform. The study found 36% of Australians are interested in using simplified, one-stop access to multiple services.

Free video demand solid as Pay-TV subsides

SVOD services have not been the only winners during the past 12 months with free to air TV apps also growing viewership. Broadcasting Video on Demand services (BVOD), including 9Now, ABC iView, etc., have benefited as Aussies searched for more content during the lockdown, especially as a trusted news sources for information about the current health crisis.

The main BVOD platforms had upwards of 10 million Australians using their service during FY2020 and almost half of survey respondents claimed they are spending more time on BVOD due to COVID-19.

In contrast, the total pay-TV market (which includes residential cable, satellite and IPTV) was down 6% 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.

Fetch TV with its mixed business model as both a set top box platform and an IPTV subscription service remained the growth engine for the pay-TV market alongside the uptake of broadband bundles.

Streaming Music Market Grows

The total number of streaming music subscriptions only increased 2% year-on-year to 12.2 million at the end of June 2020; however, over half are now paid subscriptions, compared to 42% at the end of June 2019.

The top three streaming music service providers in Australia remained Spotify, Google (including YouTube Music, YouTube Premium and Google Play Music) and Apple. Streaming music providers are increasingly focused on the podcast segment as growth has slowed.

According to Telsyte’s research, more than one in four Australians aged 16 and over listened to podcasts between January and June 2020, with comedy, health and news and politics related podcasts most popular.

Video Game Subscriptions Explode

Video games have been booming in popularity following the lockdown. About half of Australian households have a gaming console and 5 million people regularly purchase games (downloads and physical) making it a vibrant part of the entertainment market.

As well as dedicated consoles, Telsyte research shows that gamers overall were spending between 25 and 35% more time on games during the pandemic ranging on devices such as smartphones, tablets, computers and gaming consoles.

Australians had 5.8 million games related subscriptions at the end of June 2020, consisting of console subscriptions (e.g. PlayStation Plus, Xbox Live Gold), video game service subscriptions (e.g. EA Access, Xbox Game Pass and Apple Arcade), and Massively Multiplayer Online Game (MMOG) subscriptions (e.g. World of Warcraft).

The biggest growth was in video game service subscriptions which more than doubled to 2 million at the end of June 2020 (up from 0.9 million in June 2019). Telsyte forecasts this market is set to explode as several companies vie to be the ‘Netflix’ of games.

The study found a third of gamers are already aware of cloud gaming, where games are streamed from a remote server rather than stored locally on the users’ devices. This allows games to be played on devices with less computing power and the games also do not need to be downloaded and stored on the local device.

“Streaming gaming could be a game changer for the industry as it opens high end gaming to almost any device,” Fadaghi says.

Telsyte also found a growing interest in next-generation PlayStation 5 and Xbox Series X consoles as release dates get closer. Both will likely to help boost the games subscription market.

Telsyte estimates the total number of games related subscriptions could reach more than 17 million by June, enabled by fast broadband and 5G Internet connectivity, next generation game consoles and services that will appeal to casual players on smartphones and tablets.

Quibi Testing Ad-Supported Service in Australia, New Zealand

Upstart mobile-centric subscription streaming video platform Quibi has reportedly begun offering free ad-supported service in Australia and New Zealand. The SVOD service launched April 6 in the United States from DreamWorks Animation founder Jeffrey Katzenberg and eBay founder Meg Whitman.

With The Wall Street Journal in June reporting Quibi would generate less than 2 million paid subscribers by April 2021, the platform is apparently trying AVOD to jumpstart consumer traction. The service had projected 7.4 million paid subs after one year of operation.

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Quibi costs $4.99 monthly in the U.S. with advertising; $7.99 without ads. The AVOD trial is reportedly being rolled out on a market-by-market basis.

AVOD has gained mainstream adoption following high-profile corporate acquisitions of Pluto TV by ViacomCBS and Tubi by Fox Corp., respectively. Pluto claimed 33 million average monthly viewers through June 30.

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Tubi in February claimed 25 million average monthly users, with users supposedly watching 163 million hours of content in December — which was an increase of 160% from the previous-year period.

Regardless, Quibi needs to gain user traction to justify nearly $1.7 billion in third-party funding. The platform has an unfortunate predecessor in Verizon’s short-lived go90 mobile-centric video streaming app that folded less than three years after launch, resulting in a $1 billion write-down by the telecom giant.

Disney+ Signs Up 2 Million Aussies in 4 Months

Disney’s subscription streaming video platform launched in Australia and New Zealand on Nov. 19, 2019 — one week after its North American debut. New data from research group Roy Morgan finds Disney+ has attracted 2 million Aussies after four months. By comparison, Netflix took six months to generate 2 million subs after launching down under in 2015.

Disney+ is ahead of Amazon Prime Video with 1.6 million (up 1 million) and YouTube Premium at 1.47 million (up 161,000).

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Regardless, Netflix has extended its SVOD lead with 12.59 million Australians having access, an increase of more than 1 million. It is followed by Foxtel (including Kayo Sports) with an increase of 63,000 (4.87 million and 953,000 for Stan (3.72 million).

The relatively small sub increase for Foxtel is largely due to the strong performance of their sports-centric streaming service Kayo Sports, which attracted 704,000 viewers by March 2020, up by 530,000 on a year ago.

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When it comes to multiple subscription television services, Netflix plus Stan is the most popular combination with over 3.4 million Australians having access to both just ahead of Netflix plus Foxtel (3.1 million).

“The growth of subscription television services in Australia sped up in March as the nation entered a period of lockdown [due to COVID-19],” Roy Morgan CEO Michele Levine said in a statement.

Levine said that in March, more than 1 million Australians gained access to a SVOD service in their household. That compared with 893,000 SVOD additions in February.

“The increasing growth in the overall market has been predicted by many as Australians have been confined to their homes over the last two months and these results are the first to back up that prediction,” Levine said.

She contends that OTT video is growing due to the fact that different members of the same household are now able to have their own subscriptions to different services. Of Disney’s 2 million SVOD viewers, a large majority of 1.67 million (83%) subscribe to Netflix and 897,000 (45%) watch Stan.

“Foxtel’s launch next week of a new cut-price streaming service to go head-to-head against Netflix, Stan and Disney Plus does raise the risk of cannibalizing Foxtel’s existing revenue streams, but also sets Foxtel up take a share of the growing market of consumers increasingly gravitating towards low-cost services that offer extensive and deep catalogs,” Levine said.

BritBox Taking SVOD Platform to Australia

BritBox, the subscription streaming video service targeting older women who like British-themed content, is heading Down Under.

Launched in 2017 in the United States by BBC Studios and ITV, the service bowed operations in the United Kingdom last November. It just announced that the North American service, which includes Canada, had topped 1 million subscribers paying $6.99 monthly.

Launch date and pricing for Australia have not been disclosed.

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“There‘s a real opportunity to build on the momentum and brand that has been established in North America and to make BritBox part of BBC Studios’ future strategy in Australia,” Fiona Lang, GM for BBC Studios ANZ, said in a statement. “Complementing our existing partnerships in the region, BritBox will draw on our vast combined catalogue of acclaimed British content and will deliver it directly to Australian audiences via a proven and seamless streaming service.”

Augustus Dulgaro, EVP, Asia Pacific sales & distribution, global entertainment, ITV Studios, said the BritBox brand’s popularity underscores the demand for niche content targeting specialized audiences.

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Indeed, Netflix, Amazon Prime Video and AMC Networks’ Acorn TV all deliver British-themed content, including myriad original productions. BritBox has six originals in its portfolio as well. Acorn TV, launched about the same time as Netflix, has a combined 2 million subscribers with sister property, Urban Movie Channel.

“We look forward to bringing [the service] to Australian fans in 2020,” Dulgaro said.

 

Government: 71% of Aussies Use SVOD Services

There’s a reason Netflix is booming down under. New data from the Australian Communications and Media Authority suggests 71% of Australian households with a television subscribed to at least one SVOD service in 2019.

Netflix, which help launch the Aussie SVOD market in 2015, had about 11.5 million subscribers in the country last summer, up 17.6% from the previous-year period. The leading Australian-owned SVOD is the Nine Entertainment Company owned Stan, which has about 2.9 million subs, up 43.2%.

ACMA said 10% Australian households had four or more SVOD services in the home in 2019, up from 4% in 2017. Overall, 83% of Australian online users said they streamed viewing paid or ad-supported video content in the past six months.

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“Australians are using their fixed Internet connections for data-hungry applications such as video streaming and are spending more time watching content online,” ACMA chair Nerida O’Loughlin said in a statement.

O’Loughlin said online video and use of smart devices is escalating as high-speed networks create new markets for innovative services across the Australian economy.

“It’s clear that Australians have embraced technology, which is helping drive demand for faster Internet,” she said.

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The government agency said Australians downloaded almost six million terabytes of data over the three-month period last summer, enough to watch about 2.2 billion hours of HD video. Of that data, more than 88% was downloaded through fixed Internet services.

About 50% adult Aussies use a smart device other than a computer, tablet or mobile phone to connect to the Internet.

 

Netflix Top-10 Lists Underscore Streamer’s Vital Global Markets

During the end-of-year winter lull, Top 10 lists permeate the media landscape, including at Netflix.

The SVOD behemoth reportedly disclosed its most-viewed TV series and titles overall in five key markets outside the United States: the United Kingdom, India, Australia, France and Germany.

The U.K., Germany and France collectively had about 21 million subscribers at the end of 2018, according to Statista. India, with its massive population and large mobile user base, remains a new market for streamers, including Netflix. The Economic Times of India estimates Netflix’s sub count at 1 million to 2 million.

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The streaming video pioneer continues to lead the growth of SVOD services in Australia with more than 11.2 million Aussies having a subscription — up 25% from a year ago, according to Roy Morgan.

As expected, many of Netflix’s top programs in the United States also fared well globally — underscoring the streamer’s push toward producing local content for a worldwide audience.

Top performers include “Stranger Things,” “Black Mirror,” “The Witcher,” “The Umbrella Academy,” movies 6 Underground, The Irishman, The Highwaymen and Murder Mystery, and documentary  “Conversations With a Killer: The Ted Bundy Tapes,” among others.

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Notable exclusion from the U.K., the new installment of “The Crown.”

Netflix’s Top 10 most-popular releases, movies and TV series by country as reported by Deadline.com:

Top 10 Most Popular Releases of 2019 in U.K.:

“The Disappearance of Madeleine McCann”
6 Underground
Murder Mystery
“The Witcher”
The Irishman
“After Life”
“Stranger Things 3”
“Our Planet”
“Sex Education”
“Conversations with a Killer: The Ted Bundy Tapes: Limited Series”

Top 10 Most Popular Series:
“The Witcher”
“After Life”
“Stranger Things 3”
“Sex Education”
“The Umbrella Academy”
“You”
“Unbelievable”
“Top Boy”
“Black Mirror”
“Dirty John”

Top 10 Most Popular Releases in Australia:
Murder Mystery
6 Underground
“The Witcher”
Isn’t It Romantic
“Lunatics”
The Irishman
“Stranger Things 3”
Extremely, Wicked, Shockingly Evil and Vile
Triple Frontier
“Dead to Me”

Top 10 Most Popular Series:
“The Witcher”
“Lunatics”
“Stranger Things 3”
“Dead to Me”
“The Umbrella Academy”
“Unbelievable”
“Dirty John”
“Sex Education”
“Rick and Morty: S4”
“You: S2”

Top Ten Most Popular Movies:
Murder Mystery
6 Underground
Isn’t It Romantic
The Irishman
Extremely, Wicked, Shockingly Evil and Vile
Triple Frontier
Aquaman
The Highwaymen
The Perfect Date
Falling Inn Love

Top 10 Most Popular Releases in India:
“Sacred Games: S2”
Kabir Singh
Article 15
“Bard of Blood”
Drive
Badla
House Arrest
6 Underground
“Delhi Crime”
Chopsticks

Top 10 Most Popular Series:
“Sacred Games: S2”
“Bard of Blood”
“Delhi Crime”
“Sex Education”
“Leila”
“Stranger Things 2”
“Typewriter”
“Little Things: S3”
“The Witcher”
“The Spy”

Top 10 Most Popular Movies:
Kabir Singh
Article 15
Drive
Badla
House Arrest
6 Underground
Chopsticks
Baazaar
Luka Chuppi
Romeo Akbar Walter

Top 10 Most Popular Releases in France:
“Money Heist: S3”
“The Witcher”
6 Underground
“Sex Education”
“Umbrella Academy”
“Stranger Things 3”
“You: S2”
Triple Frontier
“Elite S2”
“Family Business”

Top 10 Most Popular Series:
“Money Heist: S3”
“The Witcher”
“Sex Education”
“Umbrella Academy”
“Stranger Things 3”
“You: S2”
“Elite S2”
“Family Business”
“Raising Dion”
“13 Reasons Why: S3”

Top 10 Most Popular Movies:
6 Underground
Triple Frontier
Banlieusards (Street Flow)
The Irishman
Klaus
The Perfect Date
Isn’t It Romantic
Tall Girl
Murder Mystery
Falling Inn Love

Top 10 Most Popular Releases in Germany:
6 Underground
“Money Heist”
“The Witcher”
Murder Mystery
The Irishman
“Sex Education”
Triple Frontier
Isn’t It Romantic
Falling Inn Love
The Perfect Date

Top 10 Most Popular Movies:
6 Underground
Murder Mystery
The Irishman
Triple Frontier
Isn’t It Romantic
Falling Inn Love
The Perfect Date
Wie Jodie Uber Sich Hinauswuchs
The Knight Before Christmas
The Highwaymen

Top 10 Most Popular Series:
“Money Heist”
“The Witcher”
“Sex Education”
“Stranger Things 3”
“You”
“The Umbrella Academy”
“13 Reasons Why”
“The I-Land”
“Elite”
“Black Mirror”

Amazon Announces First Aussie Original Series

Amazon Dec. 5 announced its first scripted Australian original series, “Back to the Rafters,” which will begin production in Sydney in 2020 and launch on Prime Video in Australia and in more than 200 countries and territories.

“Back to the Rafters” is a follow-up series to “Packed to the Rafters,” which was one of Australia’s most popular drama TV shows showcasing parents Dave and Julie, working to balance their own journey as a couple with the ups and downs of raising a family into adulthood.

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“Back to the Rafters” will feature original cast members Rebecca Gibney (Julie Rafter), Erik Thomson (Dave Rafter), Jessica Marais (Rachel Rafter), Hugh Sheridan (Ben Rafter), Angus McLaren (Nathan Rafter), Michael Caton (Ted Taylor) and George Houvardas (Nick “Carbo” Karandonis).

The show picks up six years since the end of the original series with Dave and Julie have created a new life in the country with youngest daughter Ruby, while the older Rafter children face new challenges and Grandpa Ted struggles to find his place.

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“Back to the Rafters” is the first scripted Australian Amazon Original series that has been announced this year, along with “LOL: Last One Laughing,” hosted and executive produced by Rebel Wilson; “The Test: A New Era for Australia’s Team,” a docuseries following the Australian Men’s Cricket team during the 2018/2019 season; and a series of 10 Amazon Original stand-up specials featuring Aussie comedic acts, including Tom Gleeson, Tommy Little, Judith Lucy and more.

Disney+ Launches in Australia, New Zealand and Puerto Rico

Disney’s branded subscription streaming video service, Disney+, has quietly launched in Australia, New Zealand and Puerto Rico — and in the process put immediate competitive pressure on reigning SVOD services Netflix and Stan with more than 11 million and 2.9 subscribers, respectively.

The arrival of the $8.99 (Australian) monthly or $89.99 annual Disney+ service features the identical 600 movies and 7,000 episodic programs available in the U.S. and Holland. And for the first time, the first 29 seasons of “The Simpsons” are available  Down Under.

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The Australian debut coincided with Disney content leaving Stan and also being removed from Foxtel, according to Ampere Analysis.

Disney+ household subscription affords up to four people streaming at the same time, downloads on up to 10 devices and the ability to set up to seven profiles.

Disney+ bows in the United Kingdom, France, Germany, Italy and Spain on March 31, 2020.

DVD, Streaming Video Up Aussie Home Entertainment Spending 4% in 2019

Packaged media is not dead down under. Consumer spending on TV and video in the home in Australia is projected to increase 4% in 2019, according to new data from Futuresource Consulting.

The London-based research firm said Australian consumers continue to show a preference for entertainment ownership, with electronic sell-through of movies to own (EST) continuing to outperform transactional VOD movies.

Notably, physical media (DVD, Blu-ray Disc) continues to play a role, generating nearly two-thirds of transactional home video spend in 2019. However, following global trends, the Australian market is moving towards digital with transactional digital spend exceeding physical by 2021.

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“The Australian market is delivering a solid overall performance, but despite the continuing upsurge, its key components are experiencing wildly varying fortunes,” physical analyst David Sidebottom said in a statement. “SVOD is the country’s shining star, with our forecasts indicating a net subscriber increase of over 2 million expected in 2019 and consumer spend poised to break the AU$1 billion barrier for the first time.”

Sidebottom said Netflix is expected to increase its investments in Australia, as it seeks to maintain growth and increase ARPU. By 2023, the number of Australia households with at least one SVOD service is set to reach 80%.

“That’s one of the highest levels on the planet,” he said.

Futuresource found that Google Play and improved set-top box functionality for pay-TV operators have combined as key drivers in the digital transactional home video market.

“The increased visibility of movie purchasing on YouTube has also helped maintain healthy levels of EST movie growth, capitalizing on the significant YouTube audience,” Sidebottom said. “Our forecasts indicate consumer spend on transactional digital video will grow by 12% this year, the strongest year of growth since 2015, when the market was considerably more embryonic.”

Total video entertainment spend is projected to climb from AU$5.2 billion in 2018 to AU$6.1 billion by 2023, driven primarily by the rise of SVOD.

 

Analyst: Amazon Upping Prime Video Content Down Under

With Disney’s pending subscription streaming video service targeting Australia as a major market, Amazon has upped its Prime Video content availability in the region.

While Netflix remains the dominant over-the-top video player in Australia, new data from Ampere Analysis suggests Prime Video has been more aggressive with new content offerings in a SVOD market that will reach 65%  household penetration by the end of the year.

Prime Video increased its content hours by 84% from June 2018 through June 2019, compared to just 18% for Netflix.

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Ampere contends Netflix has produced fewer original productions (17) in Australia compared to other regions such as Mexico (36) and France (30).

“The Australian SVOD market is characterized by transition and opportunity, so it’s not surprising that Amazon has been concentrating efforts here,” Guy Bisson, director at Ampere Analysis, wrote in a note. “The new service from Disney will meet the demand for Children & Family and Action & Adventure content in particular, and by developing a family of streaming services, it will be a ‘super aggregator’”.

The London-based research firm says Aussie SVOD homes prefer indie/arthouse, horror, arts & culture, kids, romance and action compared to documentaries.

The latter among Amazon’s biggest content growth categories, in addition to action/adventure, crime/thrillers and reality.

Netflix continues to focus on romance, crime/thriller, comedy and drama, while local SVOD rival Stan targets kids and family.

“We believe [these trends] will continue, anticipating that the gap we’ve identified in the market for a premium streaming aggregator will be filled by partnerships, original productions and acquisitions,” Bisson wrote. “This is a great time to be a [streamer]in Australia.”