Pandemic Insight: SVOD, Movie Transactions, Churn Soar; AVOD Ads Decline

A silver lining in the ongoing coronavirus pandemic has been a surge in home entertainment activity among consumers either on mandated lockdown or deprived of live and theatrical or venue options. Paid subscriptions are the dominant business model for streaming video services in the U.S., although competition from free ad-supported services is growing. Or is it?

The data is clear: SVOD services such as Netflix and Disney Plus have seen skyrocketing sub growth worldwide as consumer gravitate toward on-demand movies and TV shows. Upstart rival ad-supported VOD also experienced usage increases — and advertising declines.

Roy Morgan research in Australia found subscription TV services made large gains during 2020 with viewership soaring for the top five services compared to 2019. The strong increases across the board meant that more than 80% of Aussies (17.3 million), now watch SVOD in an average four weeks — up by more than 2.4 million viewers on a year ago.

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“Netflix remains the clear market leader in Australia and grew its viewership by 2.26 million (up 19%) from a year ago to 14.17 million viewers. Over two-thirds of all Australians aged 14+ (67.2%) now watch Netflix in an average four weeks,” read the report.

Media Partners Asia found that in Indonesia about 7 million people have subscriptions across the Top 10 services — up 3.6 million subs between Sept. 5th 2020 to Jan. 6th 2021. The research shows the top 4 Aussie platforms account for 83% of the total subscriber base with Disney+ Hotstar in the lead with 2.5 million new customers, followed by Viu (1.5 million), Vidio (1.1 million) and Netflix (850,000).

At the same time, ad-supported VOD saw a slight decline (5%) in annual ad impressions due to COVID-19 and the resulting fluidity in ad creatives and ad campaigns as the pandemic undermined content creation, according to new Canoe data.

“The lockdown measures to help slow the spread of COVID-19 created a boost in viewership from March through May. Then, September through December viewing was impacted due to production shutdowns, delaying new fall-season entertainment content,” read the report.

Meanwhile, Deliotte found the pandemic has increased one-off content viewing among new SVOD viewers and slowed some churn among existing subs. The consulting giant found that among survey respondents who cut a streaming service since the start of the pandemic, 62% had signed up to watch a specific show and then cancelled once they were done. And they canceled quickly: 43% canceled the same day they decided they no longer wanted the service.

Overall, data from May to October 2020 suggests that SVOD providers may be getting better at demonstrating value to consumers. Those consumers who canceled due to cost fell from 36% to 31%, and those who left after a free trial or discount ended also decreased from 35% to 28%. By October 2020, 25% of subscribers had canceled a service and replaced it with another new service, up from 17% in May.

Notably, Deloitte found that 90% of respondents who paid to watch new movie releases at home said they would likely do so again — underscoring Hollywood’s move to offer new movies to consumers directly in the home sooner. Indeed, 23% of respondents said they would continue the platform if they could purchase new movie releases the same day they are released to theaters.

When Deloitte asked subscribers what would keep them from cancelling a paid streaming service, 27% said they would stay to see an exclusive new movie or series they were interested in, and 28% said they would stay if they could switch to a reduced cost, ad-supported tier of the service.

“In our January 2020 survey, only 20% of respondents who subscribed to a streaming video service had cut a service in the previous 12 months, but by October, 46% had cut at least one in just the previous six months,” read the report.

In May, Deloitte said 23% of respondents had added a streaming video service since the start of the pandemic, and 9% had added and canceled services. By October, 34% had both added and canceled streaming video services. The early part of 2020 saw greater acquisition, but the second half has been characterized by churn.

“While COVID-19 appears to have accelerated streaming video subscriptions, the dynamism we now see is likely the emerging characteristic of a more mature and competitive market,” Deloitte said.

Netflix, Amazon Prime Video See Double-Digit Growth in New Zealand

Even before the enforced lockdown in New Zealand due to concerns about the spread of the coronavirus, new data from Australian research firm Roy Morgan shows Netflix and Amazon Prime Video experienced double-digit viewership growth over the past 12 months.

Netflix is the most watched service, with a total of 2.42 million households having access, an increase of 291,000 households from the previous-year period. It is followed by Sky TV incl. Neon with 1.7 million households (+66,000), Lightbox with 875,000 (+113,000), Apple TV with 377,000, Prime Video with 322,000 (+191,000) and YouTube Premium with 234,000 (-7,000).

The data is based on in-depth interviews with more than 6,000 New Zealanders. CEO Michele Levine says that while Netflix remains the most popular pay television service, a number of its competitors are also experiencing considerable growth.

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“Netflix entered the New Zealand market in 2015, and has since transformed the television-watching landscape,” Levine said in a statement. Over the past year an additional 181,000 New Zealanders have gained access to a streaming service in their household and these service now reach over 3.2 million (82% of the population).”

Netflix and Lightbox are the two major services with large increases in viewers. New entrant Apple TV now reaches around 10% of the population while Prime Video has also experienced a large surge in viewers.

The survey was taken just as Disney+ was entering the market. Levine said the SVOD it is set to provide strong competition to established pay television services.

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“The current lockdown should provide a boost to not only new entrants such as Disney+ but also more established services as housebound Kiwis look for ways to entertain themselves,” she said.

Roy Morgan: Disney+ Attracts 1.8 Million Subs in Australia

New data from Roy Morgan reveals Disney+ is now Australia’s fourth most-popular subscription streaming video service four months after its launch, with 1.8 million subscribers.

The Aussie research company said Netflix remains the nation’s most-watched subscription television service, with 12.20 million residents having access to it, an increase of 942,000 on a year ago. It is followed by Foxtel on 4.85 million (-98,000) and Stan on 3.70 million (+1.09 million).

Disney+, which entered the Australian market in November 2019, is ahead of Amazon Prime Video on 1.48 million (+914,000) and YouTube Premium on 1.48 million (+244,000).

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Roy Morgan CEO Michele Levine says that while Netflix is the clear leader in subscription television services, there is growing competition to secure the attention of Australian viewers.

“Since entering the Australian market in 2015, Netflix has reshaped how we watch television,” Levine said in a statement. “It created a product which allows users to make their own selection of uninterrupted television to watch whenever they want. Its success not only brought other players into the market, it forced commercial television to adapt by creating its own online streaming channels.

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Levine said the COVID-19 pandemic, which has forced many Australians to self-isolate at home indefinitely, presents an unexpected opportunity for streaming services such as Disney+ to continue the momentum of customer growth in the months ahead.

The research firm said Netflix and Stan remain the most popular SVOD combination in Australia, with 3.44 million viewers having access to both services and closely followed by Netflix and Foxtel (3.14 million).

The report — based on online survey of 12,082 respondents over the age of 14 — found that 1.67 million Disney+ subs also have access to Netflix. This represents 93% of Disney+ viewership but only 14% of Netflix viewers.

Nearly 900,000 Aussies have access to both Disney+ and the locally owned Stan. This level of viewership is equal to half of all Disney+ viewers and represents nearly a quarter of Stan’s 3.7 million viewers. A far higher rate than for rival streaming service Netflix.

Significantly for traditional pay TV service Foxtel, only 11% of their viewers have signed up for Disney+, a lower rate than for either Netflix or Stan.

Netflix Australia Tops 11.6 Million Subscribers

Netflix has more than 11.6 million subscribers in Australia — four years after launching service in a country of 24 million pe0ple. That tally is up nearly 18% from a year ago, according to new data from research firm Roy Morgan.

Nearly 14 million Aussies (age 14 and above) now have access to pay-TV or subscription video-on-demand, which is up nearly 8% from last year.

Leading Australian-owned SVOD service Stan has about 2.9 million subs, up more than 43% from a year ago.Rival services include Amazon Prime Video (+130.7%), YouTube Premium (+37%) and Fetch (+20.9%).

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New Foxtel-owned sports streaming service Kayo Sports has more than 300,000 subs after just six months of operation.

Roy Morgan CEO Michele Levine says more than two-thirds of Australians now have access to SVOD services in their households – driven largely by the services’ lower monthly cost compared to the traditional pay-TV bundle.

“The results indicate that the low monthly prices for the new subscription services led by Netflix are driving take-up across traditional demographic boundaries, while the higher cost of a full-bundle service from Foxtel is generally favored more by larger family units,” Levine said in a statement.

“Netflix has undoubtedly been a star performer since launching in … a market with a proliferating array of choices for the consumer. It will be more important than ever for existing and new streaming services to correctly identify which genres will appeal to the widest possible audiences.”

Apple TV+ Streaming Service to Target 17 Million Users Down Under

Apple’s new streaming TV service, Apple TV+, could capture significant market share in Australia based on the tech companies current market penetrations, according to new data from research firm Roy Morgan.

The data suggests more than 17 million (83.4% of Australians over the age of 14) currently access streaming video services or own Apple-branded devices capable of accessing streaming video.

That market segment (14.7 million people) includes those who already use streaming video services such as Netflix (11 million), Stan, YouTube Premium, Amazon Prime Video and ABC iView, as well nearly 12 million Australians who own an iPhone, iPad, Mac running the iOS operating systems and use Apple services and apps capable of accessing the new Apple TV+ streaming TV service.

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“Apple TV+ will be able to draw upon Apple’s immense war chest of over $240 billion (over $340 billion AUD) to create content which Apple announced as ‘cash on hand’ at the end of 2018,” Michele Levine, CEO, Roy Morgan, said in a statement.

Millennials represent the largest Apple TV+ market at over 4.6 million people. This is followed by more than 4 million Gen Z and just under 4 million Gen X consumers who use streaming services.

Nearly 60% of Australians who currently access a streaming video service or use an Apple device watch the news in an average week, far ahead of any other TV genre.

Reality TV is watched by 39% of Apple users, while just under a third of Apple users watch current affairs shows (32%), sports (31%), game shows (30%) or dramas (30%).

Just over a quarter of Apple users watch home/lifestyle/travel shows (28%), comedies (27%) or documentaries (27%) and just under a fifth watch talk shows (19%).

Netflix Tops 11 Million Subs Down Under

Netflix has 11.2 million subscribers in Australia — making the country of 24.6 million people the service’s second-most popular region behind the United States.

The SVOD behemoth, which launched service in Australia and New Zealand in 2015, saw subscriptions increase more 25% through February year-over-year, according to new data from Roy Morgan  research.

SVOD continues to mushroom in popularity down under with nearly 14 million Aussies having access to some form online TV, up 11.8% from a year ago.

The leading Australian-owned SVOD is Stan, which is accessible by over 2.6 million subs — up 45.2% from a year ago. Stan is a subsidiary of the Nine Entertainment Company.

SVOD services YouTube Premium (formerly YouTube Red), Fetch and Amazon Prime Video also saw significant sub increases.

YouTube Premium has over 1.2 million users, up 31.9%, and Fetch has nearly 760,000 users, up by 9%. Meanwhile, Prime Video more than doubled its user base by 116.7% to over 570,000.

“Pay-TV/Subscription TV services are an increasingly competitive marketplace in Australia,” Michele Levine, CEO of Roy Morgan, said in a statement. “Going forward the battleground will be content and cost.”


Netflix Set to Reach 10 Million Subs Down Under — Despite Scant Physical Presence

Netflix ended June with 9.8 million subscribers in Australia, up about 30% from a year ago, according to new data from research firm Roy Morgan. The SVOD pioneer launched service in Australia and New Zealand in 2015.

Morgan contends Netflix will reach 10 million subs by September, based on an online survey of 13,200 consumers from April through June. Netflix now has 48% market penetration among Australians, aged 14 and older.

Impressive stats in a country of about 25 million people; more so considering Netflix has yet to release an original native series (“Tidelands” is in production) and reportedly doesn’t have a single Australia employee.

The service spearheads an over-the-top video market with more than 13 million subscribers. Other players include Stan, a joint venture between Nine Entertainment Co. and Fairfax Communications, with 2 million subs; YouTube Premium (formerly You Tube Red) with 1 million subs; Fetch with 710,000 subs and Amazon Prime Video with 273,000 subs.

Prime Video officially launched in Australia in June.

“Although Netflix clearly is well ahead of its rivals, other SVODs are also growing strongly – and generally at a faster rate,” Michele Levine, CEO of Roy Morgan, said in a statement. “In a changing media landscape, highlighted by the recent merger agreement between Nine and Fairfax, the impressive performance of SVOD in recent years shows there are avenues to growth for incumbent media businesses challenged by new entrants into the market.”

“Australia is a great market for us,” CEO Reed Hastings told The Sydney Morning Herald in March.

Indeed, yet how great has Netflix been for the Aussie economy? Foxtel, the country’s largest pay-TV operator, saw its subscriber base decline nearly 3% in 2017 to 2.8 million – largely due to Netflix. The nation’s pay-TV market stands around 3.6 million subscribers.

Netflix in 2016 shut down the ability for subs employing virtual private networks (VPNs) from accessing content outside of their geographical location – such as Australia.

Outraged by the apparent one-sided business model, former Treasurer Joe Hockey in 2015 introduced legislation (dubbed the “Netflix Tax”) aimed at taxing foreign companies delivering digital content into Australia. The updated GST (goods and services tax) went into effect last year.

Now, countries such as Holland are considering laws that would require foreign SVOD services (i.e. Netlflix and Prime Video) to stream/produce localized content.

“Quotas are well-intentioned ways for governments to try to make sure there’s investment in local content, to try to strengthen local culture,” Hastings told The Morning Herald. “But, like most things, the regulations often backfire.”

“Tidelands,” the 10-episode series about an ex-con who returns to her local fishing village and discovers more than old memories, is set to begin streaming this year.


Kiwis Up SVOD Usage

More consumers in New Zealand are streaming video entertainment. Nearly 70% of Kiwis surveyed consider over-the-top video a good value proposition compared to pay-TV, according to new data from Canstar Blue. That was up 5% from last year.

Not surprisingly, Netflix has a lot to do with changing consumer behavior. Since launching service in Australia and New Zealand three years ago – the first in Asia Pacific for Netflix – consumer adoption has skyrocketed.

Netflix growth in Australia exceeded TV broadcast over an 18-month period last year – reaching more than 7.5 million subscribers through June, according to Roy Morgan Research.

But that affection didn’t immediately replicate itself in neighboring New Zealand.

“Until relatively recently, our TV choice was terrestrial TV, or paid service, Sky,” said Jose George, GM at Canstar. A sentiment, George said, was underscored by public perception that over-the-top platforms offered limited content.

“[Yet], streaming services continue to evolve, offering exclusive TV series on standard or HD services at a fraction of the cost [of pay-TV],” George said. “You don’t have to scratch too deep to see why there’s been such a surge in consumer sentiment.”

The uptick in over-the-top video in New Zealand has been helped by billions in infrastructure investment, resulting in more than 1.9 million broadband connections in 2015.

“Evidently, Kiwis love the Internet and the services it allows us to tap into,” George said.