Forecast: Australian online video sector up $5bn+ by 2025
October 29, 2020
A report from industry analyst & advisory group Media Partners Asia (MPA) estimates that Australia’s online video industry will generate an estimated $2.9 billion (€2.4bn) in revenue in 2020, including advertising & subscription revenue. Over the next five years, MPA expects the online video sector to grow at 13 per cent CAGR to reach $5.3 billion.
According to MPA, YouTube, Netflix, Disney+ and Amazon Prime Video will have an estimated 65 per cent share of total revenues in 2020. The most significant local player is Nine Entertainment, which owns and operates two OTT platforms – 9Now (AVoD) and Stan (SVoD) which are expected to have ~9 per cent of total online video revenues in 2020.
SVoD continues to grow rapidly, with revenues climbing an estimated 32 per cent in 2020 to $1.4 billion. By year-end 2020, Netflix will continue to lead the market with 6.1 million subs and ~$710 million in revenues, driven by the popularity of its movies, series, kids and documentaries. Nine’s Stan is the second largest player with 2.3 mil. subs while Disney+ and Amazon Prime Video come third with 1.8 million subs each. Another key player is Foxtel with 1.4 million OTT subs through its sports (Kayo) and entertainment (Binge and Foxtel Now) platforms. MPA projects the SVoD market to reach $2.9 billion by 2025, a 15 per cent CAGR from 2020.
MPA executive director Vivek Couto, commented: “Australia’s online video sector is larger than either the free and pay-TV sectors, driven by the increasing availability and scaled consumption of premium entertainment and sports. Global media platforms have also grown with relative ease in the English-speaking market. We expect subscriber growth to decelerate in the future as the SVoD market is maturing though pricing power will increase as Netflix and Stan see more subscribers moving up to higher priced tier and Disney+ launches a new service under the Star brand. New market entrants include the Viacom CBS-owned Paramount+, which is expected to launch in 1H 2021, and longer-term potentially Peacock, the freemium service operated by NBCUniversal.”
Online video will account for 23 per cent of total digital ad spend in 2020. YouTube dominates with more than 60 per cent of total AVoD revenues. BVoD platforms, comprised of 9Now, 7plus, 10play and SBS On Demand, will close 2020 with a 11 per cent share of AVoD revenues. Online video advertising is expected to expand at a CAGR of 11 per cent over 2020-25 to reach $2.4 billion by 2025.