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The latest monthly data from Roy Morgan Research shows that online entertainment streaming service Netflix has hit 8 per cent of Australian homes reaching 1.89 million people 14+ in July. Over 1 in 3 households now have some form of pay or subscription TV, up almost 30 per cent since the start of 2015.
According to the firm, at the start of 2015, the very idea of paying for TV content was practically synonymous with Foxtel. In January, 95 per cent of the 2.4 million homes with Pay/Subscription TV market had Foxtel, and just 5 per cent used only another service such as Fetch or Presto.
Enter Netflix, which has grown to 737,000 household subscribers in July, some 1.89 million people. Roy Morgan Research describes this as “a stellar increase” from 748,000 people in April to 1.16 million in May to 1.53 million in June. Netflix is expanding the category by luring new customers to paid/subscription TV—now in almost 3.1 million homes. Stan and Presto have also made gains in the number of households subscribing. So while Foxtel’s share has fallen dramatically to 76 per cent, the size of its customer base is almost unchanged (2,346,000).
In July, 7.3 per cent of Foxtel’s homes (171,000) were also subscribing to Netflix—a rate not much below the national Netflix take-up of 8.0 per cent of households. The consistent number of Foxtel homes suggests that many of its customers are, for now at least, trialling Netflix as an add-on to their main pay-TV provider.
“Our ongoing month-by-month research is already giving some early indications of the newly competitive pay TV marketplace,” advised Tim Martin, General Manager – Media, Roy Morgan Research.“For many years prior to the arrival of Netflix, total uptake of pay or subscription television had remained steadily in the region of 25 to 30 per cent of households, unable to break through to a wider audience. Clearly, there was plenty of space for the market to grow,” he suggested.
“In just four months, Netflix has expanded the total market up to over a third of all homes. So far, it appears Foxtel hasn’t been damaged by the arrival of Netflix. It may turn out to be that the two are not direct competitors after all: Foxtel subscribers will view Netflix as an add-on provider, and non-subscribers were never going to get Foxtel anyway. As our sample of subscribers grows, we will be able to dig deeper and deeper into the underlying differences between the target audiences and uptake of Foxtel, Netflix and other providers,” he noted.