Netflix’s entry into the Australian market is putting pressure on existing entertainment platforms like Foxtel, free-to-air television and the myriad of on-demand web-based video streaming services, Roy Morgan boss Michelle Levine tells Business Insider.
But it’s a battle which Levine warns is just getting started.
“Netflix has come in with an absolute stellar increase [of users]… but I think what we’ll see is the others lifting their game,” she said.
“It’s definitely a really competitive market, I just imagine that what’s going on behind the scenes are all sorts of relationships and partnerships being formed so that each of these video-on-demand folk will be able to offer a range of products or services via partnerships that become a really compelling package for consumers.”
While Netflix hasn’t released local user numbers, Roy Morgan did a few sums and estimates at the end of May, more than 400,000 households or almost 1.04 million people were subscribed to the platform. (A month later in June, Roy Morgan put the figures at 559,000 homes and 1.42 million viewers).
“One of the most interesting things is they have been able to get so many people trialling them and clearly, it’s working,” she said.
By May, just 97,000 Australians were subscribed to Foxtel and Seven West’s Presto, 91,000 had Nine and Fairfax’s Stan and just 43,000 had Quickflix.
“All of the others are just going to have to work out how they’re going to hang on to their existing customers. They’ll have to be thinking about what kind of content they’re offering,” Levine said, adding that exclusive content, much like the Game of Thrones or Orange is the New Black effect, will be a major viewer drawcard.
But if Netflix were to start streaming news or live sport, Levine said they would become “an incredible competitor”. In May Netflix said it wouldn’t rule out that it would never launch into real-time content streaming but did say at the moment it doesn’t add enough value.
This morning Channel Nine announced a $925 million four-year deal broadcast NRL games on TV as well as live stream them on its digital platforms.
As for mounting a fight, Levine says the existing players would be considering their models very carefully.
“I’m sure Foxtel will be looking carefully at the kinds of programs people really want to watch,” she said. In many cases, it could be a quality over quantity game when it comes to the type of content which is screened.
“They’ll be making sure that their packages are commercially compelling. It’s the same with free-to-air, they’ll be looking at what they can do to keep people on board.”
“We haven’t even begun to see what happens there.”
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