Content Cafe

The streaming wars in Australia: the customers win

by Don Groves, Creative Content Australia, 30/7/2019

Australians have never been more spoilt for entertainment choices with a vast array of low-cost streaming platforms plus the commercial and public broadcasters’ free online services.

Competition in the streaming space will become even fiercer with the launches of Disney+, Apple TV+ and direct-to-consumer offerings from WarnerMedia, Comcast’s NBCUniversal and other international players.

Mike Sneesby, CEO of Nine’s Subscription Video on Demand (SVOD) platform Stan, which has more than 1.6 million subscribers, predicts: “What we will see over the next couple of years is international players like Disney creating a profitable streaming business in Australia by investing in highly differentiated, exclusive premium content.

“If new entrants invest at the right level and become important to the Australian consumer, they will increase the streaming market overall. Those that don’t invest at the right level won’t get traction.”

Whoever wins the streaming wars, consumers will benefit. Given the wealth of widely available film and TV content, executives insist there is no excuse or reason to stream or download content illegally. Sneesby says: “Before we launched Stan our research told us our brand had to be simple, easy to use, transparent and honest in its dealings with consumers and deliver on the things that consumers are demanding.  Those brand principles are the antithesis of piracy and take away the need or the excuse for piracy.”

Foxtel has just added Netflix to its platform as part of a new user interface, SBS on Demand will follow later this year and CEO Patrick Delany has foreshadowed integrating more services such as YouTube.

The redesigned interface makes it easier to navigate Foxtel’s 16,000 hours of TV on-demand and provides more content, including series box sets, and personalised recommendations for customers based on their viewing history. Some 75 new and returning drama series are premiering on Foxtel this year.

In May News Corp reported Foxtel had 2.4 million broadcast and commercial subscribers, down 100,000 on the previous quarter. But streaming service Foxtel Now accelerated to 505,000 subscribers and low-cost Kayo Sports has 239,000.

“We are now and will be very significant players is the standalone streaming space, as well as the subscription TV – ‘all in one place’ – space. We are already investing deeply in streaming, content and platform,” Delany says. He sees the upcoming streaming services from international players as complementary to Foxtel’s offerings and believes the 1.1 million homes which have the iQ3 and iQ4 set-top boxes will provide a critical mass for new entrants.

Foxtel and Village Roadshow have led the charge in obtaining Federal Court injunctions ordering ISPs to take down piracy websites. But Delany says: “The level of piracy in Australia is still too high, given the number of illegal websites and as thousands of set top boxes continue to flood into the country. The rewording of the legislation to include Google has helped as Google has introduced Block Site, a free, third-party Chrome extension, as well as a block site feature called Personal Blocklist.”

The SVOD market in Australia has expanded rapidly from 2 million subscribers in 2015.  In a study released in June, AMPD Research, a subsidiary of Media Partners Asia, estimated there were 10.2 million subs, led by Netflix with 5.3 million. The average household pays $35.50 per month for 1.9 streaming services and about 50% of pay-TV households also subscribe to an SVOD service, the study found.

It’s likely that many households will stick with one or two services while dipping in and out of an array of other content providers. James Bridges, CEO of documentary and current affairs streamer iwonder, says: “We project streaming-only customers will have multiple services in the future, for example, a service for dramas and comedies, another for their favourite sport, another for their kids and iwonder for their documentaries and current affairs.”

Since launching in Australia in March, iwonder, which offers more than 1,000 documentaries for $6.95 per month or $69.90 per year, has doubled the number of subscribers each month. Among the most watched titles are iwonder exclusive The Kleptocrats, an expose of the scandal that brought down the Malaysian government, Chernobyl: 30 Years On, Ten Billion and The Raft and Aussie docos Wayne, Chasing Asylum and New Island Home. 

“We are still only at the beginning of our journey and hope to even further accelerate our traction in the coming months. Audience data from Facebook suggests that there are 3.25 million users in Australia with an interest in documentary films, so we have a large addressable market,” Bridges says.

Stan has output deals with CBS’s Showtime, Starz and MGM and most of the Hollywood studios. The Loudest Voice, starring Russell Crowe as Fox News founder Roger Ailes, and Veronica Mars are performing strongly on Stan. A key point of difference is upcoming original content including The Gloaming, starring Emma Booth and Ewen Leslie as detectives and former lovers investigating the murder of an unidentified woman; and The Commons, a futuristic thriller. Matt Okine returns as lovelorn radio presenter AJ Amon in The Other Guy and Stan has commissioned a second series of supernatural drama Bloom.

Network 10’s 10 All Access, which charges $9.99 per month, is expanding its programming. Among the most watched shows are original series such as The Twilight Zone and Tell Me A Story, local hits Neighbours and MasterChef Australia and CBS series Hawaii Five-0, NCIS and Survivor.

“Consumer viewing habits continue to evolve and we expect them to subscribe to a number of SVOD services. 10 All Access has a unique offering and we feel it is well positioned for the future,” a spokesperson said.

Disney+ will tap into that company’s vast array of Pixar, Star Wars, Marvel Studios’ series and movies as well as classic animated shows and its recently acquired 21st Century Fox library. Costing $US6.99 a month, it will launch in the US on November 12.

The international pricing is yet to be revealed but the company said it expects the ultimate ratio to be one-third US subscribers and two-thirds overseas. It will spend about $US1 billion on original content for the streaming service in fiscal 2020, including acquisition of rights to film and TV titles that have streamed elsewhere.

The line-up includes the Marvel productions The Falcon and the Winter Solider; Hawkeye starring Jeremy Renner; animated series What If…, featuring alternate realities in the Marvel universe; WandaVision, with Elizabeth Olsen and Loki starring Tom Hiddleston.

Meanwhile Apple TV+ will serve both as a producer of original content (Apple’s war chest is about $US1 billion per year) and an aggregator of existing services.

The slate includes a new version of the sci-fi anthology series Amazing Stories produced by Steven Spielberg; Jennifer Aniston, Reese Witherspoon, and Steve Carell teaming up for a behind-the-scenes drama The Morning Show; For All Mankind from Battlestar Galactica‘s Ronald D. Moore; J.J. Abrams and musician Sara Bareilles’ musical drama Little Voice; and the anthology series Little America from Oscar-winning Kumail Nanjiani and Emily V. Gordon.

WarnerMedia, which was created after AT&T’s purchase of Time Warner, plans to launch HBO Max in the first quarter of 2020, priced at about $US17 per month, capitalising on the HBO brand and drawing on the conglomerate’s vast archives. An advertiser-supported version of HBO Max has also been promised.

NBCUniversal is readying a direct-to-consumer platform for a mid-2020 launch, although it will be ad-supported rather than subscription.

So, the entertainment options for Australians just keep growing, enabling nimble consumers to choose from a wide range of inexpensive platforms and services with no lock-in contracts.

Don Groves reports on the Australian and APAC screen industries for If Magazine and C21 Media after working for Variety for 24 years.