Netflix just cracked 10% of the Australian market

House of Cards on Netflix Australia. Photo: Supplied

Netflix has taken just six months to reach more than 10% of Australian homes, with Roy Morgan Research finding the US video streaming service added another 113,000 subscribers to its base in September.

Netflix subscriptions hit 968,000 last month, reaching 10.5% of Australian homes. The September growth is still below the July peak of 166,000, and growth overall has contracted for the second month in a row, but around 2.63 million Australians over 14 – an additional 409,000 in September – now have access to the service.

The growth in Netflix, April-September 2015, in Australia. Source: Roy Morgan

The latest growth comes ahead of news that Optus signed a repeat deal with Netflix to give the telco’s new customers a six-month Netflix subscription.

Roy Morgan Research’s GM of media, Tim Martin, said Optus is hoping to shore up its position in the broadband market ahead of the launch of Telstra TV and TPG becoming Australia’s second-biggest ISP following its iiNet takeover.

“Netflix service adoption in households continues to grow at a rate in the double digits month to month. These latest September figures show the number of subscriptions up 13% (over 113,000 more homes) since August, which was up 16% from July,” he said.

The take up is strongest amongst younger households, with 19.8% of young couple households subscribed, just ahead of 18.9% of young singles and 17.8% of young parents.

Nearly 1-in-6 mid-life families, 15.3%, have Netflix, with Martin explaining that the “people” rate is higher than the proportion of households because that younger demographic is likely to have more people in the house.

The challenge for Netflix is older households. It’s the largest market, but has the smallest penetration at just 1.5%.

Martin said subscriber video on demand is “barely on the radar” for that demographic, which drags down the overall figures, which would otherwise be closer to 15% of households.

Here’s the breakdown:

Source: Roy Morgan

The latest Australian figures come as Netflix blamed new chip-based credit cards for slower growth in its subscription base in the USA.

The company’s third-quarter earnings came in overnight and missed expectations with earnings per share in at $US0.07 on revenue of $US1.74 billion.

The shares were hammered down by as much as 14% as a result.

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