Report: SVOD fastest-growing revenue sector

Free to Air advertising market

Subscription Video on Demand services such as Netflix, Stan, Foxtel Now and Amazon are the fastest-growing sectors in spending.

But it is underpinned by subscribers willing to pay for premium entertainment without advertising.

PwC’s 17th annual Australian Entertainment & Media Outlook analyses trends and consumer and advertising spend across 12 segments including Free to Air TV, SVOD, Radio, Internet, Print, Out of Home (aka Outdoor) and more.

The subscription television market is the fastest growing segment in spending, forecast to rise at a compound annual growth rate of 10.1%, trailed by the internet advertising market at 7.7%. It is predicted to reach around $6.5b in revenue by 2022.

The report also noted sporting codes and content studios are increasingly going direct to fans with niche SVOD offerings. (NBCU via hayu, Disney and ESPN etc).

Broadcasters’ catch-up services and other AVOD have grown sharply while transactional video-on-demand (TVOD) has declined

In which ways do you watch TV shows, movies, documentaries and other screen content? 2014: n = 1,593, 2017: n = 1,683 *Broadcast TV figures for 2014 excludes time shifted content.

Subscription TV consumer revenue – premium box vs SVOD

Australian entertainment and media market by sector, 2017 and 2022
(A$ millions)

PwC Australia forecast the newspaper, free-to-air television, magazine and filmed entertainment spending markets will reduce in size from 2018 to 2022.

AVOD (Advertising Video-on-Demand) will be key to finding growth for free-to-air broadcasters, offering free content with ads.

Kim Portrate, ThinkTV added, “TV isn’t dying, TV is having babies. If you look at the rich range of BVOD (broadcaster video-on-demand) and SVOD services and live-streaming, TV is healthier from a content and audience point of view than ever. It is enabling its content to be consumed by Australians across multiple devices at any time of day for the length that they choose.”

Carl Fennessy, Endemol Shine Australia said. “Broadcasters must produce brilliant content first and foremost; and continue to innovate and take risks in the way that they deliver it to their audiences. They have to continue to be creatively disruptive.”

Scott Lorson from FetchTV said, “In a new world of media options, we see a fragmentation of viewing behaviours. Using a grocery analogy, consumers visit a range of stores – the baker, butcher, fruit
& veg and a convenience store. Fetch aims to provide the equivalent of a supermarket, offering the convenience of everything they need under one roof – a set top box, a single remote and one bill.”

10 Comments:

  1. It make sense, lack of ads, constant update of programming and importantly HD (even 4K sometimes) are all a winning combo for what is a cheap price in comparison with even a single blu-ray or DVD.

  2. BVOD is growing and is making up an increasing share of FTA revenues; that’s being able to watch when you want but being forced to watch short internet ads. So avoiding ads isn’t the only reason
    for online viewing growing. SVOD is where movies and quality TV drama will end up; you pay to watch when you want, by yourself, with no ads, in whatever resolution you want. It’s no wonder TVOD has fallen dramatically; buying by the episode is ridiculously expensive, you can’t loan or sell copies and DRM is a pain. AVOD is pretty much YouTube, it pays a pittance to artists but they have little choice since stuff will just be posted illegally if they don’t accept that.

  3. Even though sites like YouTube have been providing streamed videos for years the advent of smart devices especially TV’s has changed the tech landscape for viewers. FTA have dragged out the change to HD and now that 4K and even 8K is over the horizon companies like Netflix are gaining the advantage at the expense of old tech commercial television who rely on the loyalty factor for their viewership.The advantage for Netflix is that it is global and sites like Stan will need to look to expanding itself at some point as will Foxtel Now, the need for advertising revenue is not an imperative with Netflix’s larger paying audiences. FTA will survive for a while yet but changes are going to need to happen, its inevitable

  4. David is there any data that show what devices these services are shown on,my grandson watches Netflix on his mobile phone as if it was a 65″ TV!! maybe I am getting too old?

  5. If Foxtel Now subscribers were at that 920 000 figure at the end of June, Foxtel would have to be very happy. I wonder where that information came from.

  6. With such a diverse range of viewing options today the biggest issue for all broadcasters alike is revenue versus quality programs produced.

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