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The subscription television market was one of the few beneficiaries of the behavioural changes brought on by COVID-19. Questions remain as to the total opportunity in a market that is getting increasingly competitive, and where consumers are spoilt for choice. While premium box (e.g. Foxtel, Fetch) is expected to continue to decline by -7.1 percent CAGR over the forecast period, Subscription Video on Demand (SVOD) services are expected to grow at 20.4 percent over the same period.

2020 was a year of continued growth for SVOD as consumers flocked to on-demand services during enforced lockdowns.  

Many Western economies saw subscriber numbers double, and Australia similarly saw significant growth as established players such as Netflix, Amazon Prime and Stan expanded their content libraries. Binge and BritBox also entered the market, and relative newcomers such as Disney+ used the opportunity to try different business models, including Premium Video on Demand (PVOD) for new release movies.

Premium box continues to decline, but overall segment growth is much more than simple substitution.

Australia’s leading premium box delivered service, Foxtel, saw declines in its premium box service, losing approximately 267,000 cable customers in 2020 and bringing the number close to 2 million. Despite this, the migration of customers to their SVOD services such as Kayo (624,000 paying subscribers) and Binge (431,000 paying subscribers in just seven months) show the company with net growth in total subscribers of approximately 12 percent.1  These numbers demonstrate not only an evolution in business models but, more importantly, the demand for premium “cord free” SVOD services in retaining and attracting subscribers in a market competing for attention as much as subscription revenue. 

SVOD has evolved at pace as local content came into focus.

Australia continues to be spoilt for SVOD choice, with a combination of international and local players creating a market where consumers are close to the point of overload as to where they can find the content they want. With unique and exclusive content becoming an important drawcard in both acquisition and retention, 2020 saw an increase in commitment to local productions from SVOD providers, along with a continued foray into the traditional domains of the free-to-air television networks of reality and sport.

Local productions such as the successful Bump on Stan, The Test on Amazon Prime and Mr Inbetween on Binge, show there is an appetite for Australian content, and that they may well bring in new subscribers to the respective platforms. The commitment to local content production will benefit the local production industry, as well as showcase Australian stories across international and local SVOD providers. 

Power shifts continue as SVOD pushes further into the sports arena.

Despite the disruption to sport during 2020, Kayo continued to resonate with consumers as a specialist sports platform. It grew its subscriber base during 2020 - recovering from a mid-2020 content drought to a stronger position by the end of the calendar year.2  The interest in sport is clearly not limited to Kayo as other streaming providers such as Amazon and Stan have used sport as an entry point for live content, with Stan securing the rights to Rugby Union and UEFA tournaments, and Amazon Prime the rights to Australian Swimming ahead of the delayed Tokyo Olympics. Optus Sport also continues to gain traction in this space with their commitment to football - specifically the English Premier League and International tournaments. While movies, drama, and documentaries may well be the staple for many providers, sport is shaping up to be a battleground for SVOD platforms as the war for subscribers - and retaining them - continues into 2021.

Where will I watch football on paid services?

Stan Optus 10/10 play Foxtel/Kayo
EUFA Champions League English Premier League A-League Carabao Cup
UEFA Europa League FA Women's Super League W-League EFL Championships
UEFA Conference League EUROS Socceroos Serie A (Italy)
  Copa America Matildas Ligue 1 (France)
  Women's World Cup 2023   Bundesliga (Germany)
      Premier League (Scotland)
      MLS (USA)

Source: ‘Stan Sport secures UEFA Champions League, fragments football streaming landscape’, Sydney Morning Herald, 28 June 2021

With cinemas largely shut for most of 2020, the streaming services were quick to adjust their business models to trial Premium Video On Demand (PVOD) over and above normal subscription services. 

While PVOD is not new - Main Event has been in play through various providers since 1997 - its use for simultaneous or exclusive release of movies originally destined for the cinema was advanced during the 2020 lockdowns. The Disney+ release of Mulan was considered a successful experiment by the studio in "premium access", and there is a possibility that this may be a regular part of the model in coming years3, putting further pressure on cinema operators. 

Competition will continue across SVOD services, but the power still rests with consumers.

With the addition of Star to Disney+, the imminent arrival of Paramount+, the growth of a range of other mass and niche streaming services, this is a sector that will continue to see intense competition for subscribers and content. Ultimately, the greatest limitation to growth is what consumers are prepared to pay - with their money and their time across a finite number of services - to access the content they want. Attracting and retaining those subscribers at a price that delivers positive Average Revenue Per User (ARPU) and a strongly differentiated value proposition will determine growth in this critical part of the contemporary entertainment landscape.

Q1 2021 Highlights 

  • Kayo breaks through 1,000,000 paying subscribers in March 2021.4

  • Star is added to Disney+, showcasing content gained through the acquisition of 20th Century Fox.

  • ViacomCBS announce the launch of Paramount+ in Australia on 11 August, replacing 10AllAccess.5

Forecasts at a glance

Premium Box Delivered Market (A$ millions)

CAGR 2019-2025 based on the midpoint forecast scenario

Premium Box Delivered -7.1%

Subscription Video on Demand (SVOD) Market (A$ million)

CAGR 2019-2025 based on the midpoint forecast scenario

SVOD 20.4%

Total Subscription TV Market (A$ million)

CAGR 2019-2025 based on the midpoint forecast scenario

Total Subscription TV Market 6.2%

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