CHART: The insane growth of Netflix in Australia - and how Telstra needs to catch up

Where Australians are getting their Netflix subscriptions from in June 2015. Source: Roy Morgan Research.

The Netflix juggernaut continues to sweep across Australia with the video streaming service growing by another 40% in June.

Subscriptions in June jumped by 151,000 homes, up from 408,000 to 559,000, giving Netflix an estimated 1.42 million viewers, according to Roy Morgan Research.

Telcos such as Optus and iiNet, which added to the launch vibe with unmetered streaming deals and extended free trials, have done well out of it. Some 16.8% of households with fixed broadband through iiNet (or its standalone subsidiaries Internode, Westnet and Adam, with similar deals), had Netflix — almost three times the total norm of 6.1% and exactly double the 8.4% uptake rate among fixed broadband homes.

Optus enjoyed similar success with 11.7% of fixed broadband customers on Netflix — almost 40% above the norm.

Those deals have left Telstra in their wake with just 5.2% of Telstra’s fixed broadband customers using Netflix, although the country’s dominant telco wins on sheer numbers with 142,000 homes signing up, compared to iiNet’s 113,000 and 102,000 via Optus. TPG brings up the rear with 44,000 – 9.1% of its customer base.

And something communications minister Malcolm Turnbull should note – an estimated 37,000 of the 390,000 homes with an NBN internet connection now have Netflix, a market penetration of 9.6%. Meanwhile, 16% of Netflix subscribers don’t have fixed broadband and nearly all of them use some form of mobile broadband connection.

Roy Morgan Research general manager of media, Tim Martin, says that with Netflix’s partnership with Singtel-Optus now over, a bidding war between rival telcos is highly likely and Telstra is rumoured to be getting in on the act.

“For internet service providers, Netflix can be a double-edged sword. Rapid uptake can see internet traffic soar, with significant and targeted network investment required to keep pace with the demand,” Martin said. “NBN Co in particular will need to keep a close eye on how subscription video on demand affects adoption rates in particular areas.”

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