Ovum says SVOD boom won’t wipe out Pay TV or Free-To-Air TV

Australian subscriptions to streaming video on demand (SVOD) services – like Netflix, Presto and Stan – will grow by a factor of 17 between the end of 2014 and the end of 2019, according to new forecasts by Ovum.

“SVOD services have been growing rapidly in Australia since the entry of Netflix in May this year”, said David Kennedy, Research Director at Ovum. “This has sparked strong competition from the Australian incumbents – the free-to-air and pay TV industries – that is driving takeup.”

Ovum forecasts show that SVOD subscriptions will rise from only 270,000 in December 2014 to hit 4.707 million by the end of 2019.

However, Ovum does not expect cannibalisation of the existing pay TV or free-to-air subscriptions, though there will be pressure on profitability as competition for content pushes up the cost of licensing.

“SVOD, pay TV and free-to-air are distinct consumer propositions that meet different needs. We expect SVOD to grow fast, but we also expect pay TV to maintain its dominance of sport and for free-to-air to remain popular because, well, it’s free,” Kennedy concludes. “Consumers will mix and match these different services”.

Television households and subscriptions in Australia, Ovum forecast

Source: Ovum. All figures are end of calendar year. All Foxtel on T-Box and Telstra TV, and some Fetch TV subscriptions, are included in SVOD. “FTA households are households where FTA remains the main source of TV content.