Alastair is our Media Director at MPA
Australians are big content consumers. In fact, the subscription-video-on-demand (SVOD) penetration rate in Australia is 70 per cent, putting us in seventh place globally behind the US, Canada, Norway and Sweden to name a few. It therefore comes as no surprise that with so many Australians staying indoors more often with the rise of the global COVID-19 pandemic, the popularity of streaming services has seen a particularly large spike.
The competition in the Australian streaming services market has reached an all-time high too, with consumers now having a wide range of choice from Netflix to Stan, 10 All Access, Foxtel Now, Kayo, 9 Now, Hayu, Amazon Prime Video and many more, along with the newest entrants Disney+ and Binge. So what trends are being seen in this dynamic market? And where do the growth opportunities lie for businesses and media buying strategy?
Direct-to-Consumer Offerings are Increasing
A 2020 survey conducted by Ipsos revealed that 51 per cent of Australians thought it likely that they would watch more TV content from streaming services, rather than from traditional TV channels. As the major film and television giants scramble to secure the attention (and credit card details) of potential Australian subscribers, one trend being witnessed is the rise of exclusive, never-before-seen content being offered first on streaming platforms.
A strong example of this can be seen by Disney, who first released Frozen II via their Disney+ streaming platform instead of in cinemas. This is a huge financial manoeuvre, considering the first Frozen film delivered $26.7M gross at the box office in the Australian market alone, placing it in the Top 10 Box Office for 2014 ahead of X-Men: Days of Future Past and only marginally behind box-office hit Guardians of the Galaxy.
It seems the market has matured to a stage where increasingly, content owners are gauging whether more revenue will be gained via an initial cinema/broadcast release or from their over-the-top (OTT) platform.
Fragmentation of content
As more streaming services flood the Australian market, content is continually being split by rights-holders into more niche offerings – meaning Australians will likely need to subscribe to multiple channels to appease their content appetite.
According to a recent report by Statistica, from January to March 2020 over 3.45 million Australians had subscriptions to both Netflix and Stan, while 3.29 million subscribed to Netflix and Foxtel. This same report also found ‘content quality’ is considered the most important factor for live video streaming source in Australia.
Various Monetisation Models
This new era of entertainment is still yet to decide on the most profitable structure, as the lack of consistency across streaming services in terms of paid subscription, ad-funded or hybrid model continues. There is also a growing trend of models with an ad-funded tier offering free content and a premium paid tier which is ad-free.
What Does this Mean for Business?
Streaming services have gone from strength-to-strength in Australia. More exclusive content appearing first on streaming platforms clearly demonstrates the weight of investment being placed by the major industry players, a demonstration of their high-priority nature and the strong value proposition these platforms represent now and into the future. Video-on-demand therefore allows businesses to pair their advertising with premium entertainment, but at a much cheaper rate compared to cinema and live broadcast television.
More subscriptions per consumer indicates that Australians value these streaming services in terms of ease of use, quality, user experience and value proposition. While streaming services are clearly valued by content rights owners, and clearly valued by consumers, brands however are only just beginning to notice the value-for-money currently offered by video-on-demand streaming services. Competition is still relatively low, and it’s likely the current affordability of this advertising platform won’t last long. If your business is looking to increase your share of voice via innovative platforms at cost-effective rates, look for an experienced media buying agency who can highlight where the optimum opportunities lie.
The Media Planning Agency is committed to delivering strategic media solutions at the lowest possible price for our clients. Our team have quickly become one of the most trusted names in media planning and media buying, as our clients know that every cent invested in their media campaign is accurately targeted, correctly placed and secured at the right price.
Discover how your business can leverage the latest media trends to reach your strategic objectives, by calling 1300 889 115 or alternatively via email at email@example.com.