13 December 2016 Australian Over-the-Top' pay-TV subscriptions take big leap, with more viewers set to sign up this Christmas, Paywizard survey shows Share
Paying subscribers to Over-the-Top (OTT) TV services such as Netflix and Foxtel Play jumps to 40% of Australian consumers ahead of Christmas
An additional 14% of Australians plan on taking an internet TV service for the first time in the run-up to the holiday season
But operators may struggle with post-Christmas retention as 59% of first-time subscribers intend to cancel within six months
London, UK, 13th December 2016 - Australian subscriptions for Over-the-Top (OTT) TV services such as Netflix and Foxtel Play have shown major growth since last year, with the proportion consumers subscribing to OTT surging from 26% last year to 40% in 2016, according to new research from subscription, billing and CRM specialist Paywizard. While more Australians take at least one OTT service this year than last, the figure still trails the 45% global average and subscriptions increased at a slower rate than in any of the other five bellwether markets surveyed for the study into TV viewing trends during the Christmas period.
However, the research, commissioned by Paywizard and conducted by Research Now, reveals the Australian OTT market is about to get a boost this Christmas when 46% of consumers plan to watch more TV than they usually do. The research shows 23% of all consumers plan to either sign up for an OTT subscription for the first time prior to the holiday season or add an extra service in addition to one they already have - up from 18% in 2015 but lower than the global figure of 30%.
The survey of over 6,200 consumers worldwide - including 1,037 in Australia - shows 14% of Australians intend to sign up to an OTT service for the first time this Christmas, which would bring the total proportion of subscribers to 44% (when the percentage of existing subscribers is added).
However, it's clear that many new pay-OTT subscribers in Australia are uncertain about making a long-term commitment to on-demand television providers, as the survey also found that 59% those planning to subscribe to internet TV for the first time this Christmas intend to cancel within six months - higher than the global figure of 50%.
The research also examined Australian consumers' pay-TV consumption across cable, satellite and internet TV operators. The findings reveal that in addition to Foxtel, the sole provider of satellite TV services in Australia, and global OTT giant Netflix, there is ample choice in the pay-TV marketplace with seven services registering between 3% and 12% uptake among pay-TV subscribers.
Bhavesh Vaghela, Chief Marketing Officer at Paywizard, notes: The last few years has seen Australian consumers gain access to a lot more pay-TV options and, although the market is growing slower than others we surveyed, the pace of adoption is consistent. With this competitive landscape, consumers can expect to benefit from more aggressive pricing and more general and specialist content. And providers have to find ways of building loyalty.
Mobile device adoption favours the young
The research reveals 37% of consumers intend to use a mobile device of some type for at least part of their Christmas TV viewing, while 88% intend to use a TV or smart TV. Neither figure is significantly different from 2015.
The younger the Australian consumer, the more likely they are to use a mobile device for viewing their holiday TV, with more than 50% of each demographic under age 45 doing so while just 16% of the 55-plus age group intend to go mobile this Christmas.
Local challengers still in the fight!
With 51% uptake among pay-TV subscribers, Netflix has taken Australia by storm since its launch in 2015, creating a tough playing field and emerging as the biggest pure pay-OTT player. Nonetheless, it has a strong video-on-demand competitor emerging through Foxtel, which complements its core satellite TV service with its Foxtel Play and Presto TV pay-OTT services (with the latter closing in 2017 and migrating subscribers to the Play platform). After the launch last year of Amazon Prime Instant Video and specialist reality TV channel hayu - which join existing OTT brands such as Stan and Fetch TV - it is clear Australian audiences are open to a growing range of on-demand choices.
Vaghela observes: The Australian pay-OTT market has seen strong growth for early mover Netflix but it is unclear whether subscribers will stick with this service for the long run in the face of so much competition. For example, of those planning to subscribe this Christmas, 32% named Foxtel Play as their choice and others such as Stan have built strong market share.
Australian consumers planning on taking a first OTT subscription over Christmas were asked to name the three top reasons they would to keep it: value for money came out on top at 56%; but, perhaps surprisingly, the next most popular factor - listed by at 38% - was a provider showing flexibility by allowing customers to adjust their packages as needs, wants and circumstances change.
Vaghela concludes: The big takeaway for pay-TV operators in Australia is that there is still a huge untapped market that is waiting to be unlocked - 44% of Australian households don't yet pay for TV services. This suggests that operators need to do more to meet the needs of a largely underserved audience, which means they need to find better ways of both cultivating and keeping strong subscriber relationships.
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13 December 2016 Australian Over-the-Top' pay-TV subscriptions take big leap, with more viewers set to sign up this Christmas, Paywizard survey shows Share 
