Ovum: Oz SVOD Boom Doesn’t Mean End of Pay & Free TV

MELBOURNE: The SVOD boom among Australian audiences will not wipe out existing pay-TV and free-to-air subscriptions, according to data by tech research firm Ovum.

Services such as Netflix, Presto and Stan are expected to grow subscriptions from only 270,000 in December 2014 to 4.707 million by the end of 2019, per Ovum’s forecasts. However, the firm doesn’t expect cannibalization of linear subscriptions, though there will be pressure on profitability as competition for content pushes up the cost of licensing.

“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.

“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. Consumers will mix and match these different services.”