Netflix may not be as big a problem for Foxtel as many people think

Netflix is now in 8% of Australian homes, reaching 1.89 million people as of the end of July, new Roy Morgan research shows.

The latest monthly data shows more than one in three households now pay for some form of subscription content, up almost 30% since the beginning of the year.

Since Netflix launched in Australia at the end of March video-on-demand services have exploded. Netflix has grown to 737,000 household subscribers at the end of July, up from 559,000 homes and 1.42 million viewers in June.

As the market for paid content grows in Australia, Foxtel’s growth has slowed. Roy Morgan estimates while its share has fallen dramatically from 95% in January to 76% in July, the size of its customer base remains unchanged at 2.346 million.

So Netflix is having a huge impact on the size of the TV content market, and has increasing market share in the category, it has – so far – not changed the overall size of Foxtel’s customer base.

“For many years prior to the arrival of Netflix, total uptake of pay or subscription television had remained steadily in the region of 25-30% of households, unable to break through to a wider audience. Clearly, there was plenty of space for the market to grow,” Roy Morgan general manager of media research Tim Martin said.

In July just over 7% of homes with Foxtel were also subscribing to Netflix. Roy Morgan suggests that many are trialling Netflix as an add-on to their main Pay TV service.

“In just four months, Netflix has expanded the total market up to over a third of all homes. So far, it appears Foxtel hasn’t been damaged by the arrival of Netflix. It may turn out to be that the two are not direct competitors after all: Foxtel subscribers will view Netflix as an add-on provider, and non-subscribers were never going to get Foxtel anyway.

Here’s the chart.

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