Netflix and video streaming platforms to outstrip traditional pay TV Media Man Int

Netflix and video streaming platforms to outstrip traditional pay TV - 12th June 2019

Profiles

Australia Wrestling Bitcoin Business Entertainment Sports

Video streaming platforms are tipped to outpace pay-TV boxes. CREDIT: CHRIS RATCLIFFE

By Jennifer Duke

Video streaming platforms like Netflix are tipped to outstrip Rupert Murdoch's Foxtel and other traditional pay TV services for market share in the next two years as competition grows for Australian subscribers.

The local subscription television market is expected to grow at a 2.9 per cent compound annual rate from 2019 to 2023 bringing it to about $4.6 billion in value, according to PwC’s 18th annual Australian Entertainment and Media Outlook released on Wednesday.

But not all video players will benefit from the growth, with streaming players such as Netflix and Nine Entertainment Co-owned Stan forecast to grow 13.7 per cent on the same measure, while premium box services like News Corp's Foxtel to fall 2.9 per cent. Nine is the owner of this masthead.

PwC Australia partner Justin Papps, co-author of the report, said the streaming market was set to become more competitive with US entertainment giants like Disney expected to launch direct-to-consumer platforms, and the recent launch of streaming sports platform Kayo Sports by Foxtel.

"I think it goes to the strength of streaming video on demand rather than any deficiency of a box," Mr Papps said. "It's a behavioural change from customers."

In the past 12 months the subscription streaming video market has increased 31 per cent, the report said, with many Australians willing to pay for multiple platforms.

Smart televisions increasingly meant more Australians have a streaming product available without the requirement to order a box or have any specific installation, Mr Papps said.

These smart TVs are also behind some of the growth forecast for broadcast video on demand apps such as Nine's 9Now, Network Ten's 10play and Seven West Media's 7plus, which are primed for 27.7 per cent annual growth. This growing segment is, however, a modest part of the overall television market when compared to linear television which is likely to decline 1.1 per cent.

New technology is also set to affect the radio industry, where PwC has predicted audio downloaded and streamed over the internet including podcasts to grow 17 per cent compared with 1.7 per cent for terrestrial radio services. Radio executives have been expecting a boom in audio on the back of smart speakers in homes.

Another media industry expected to see significant growth over the next five years was the out-of-home advertising sector, with a forecast 8.4 per cent annual growth.

"I think they've [out of home advertisers] gone through a consolidation period with the merger of JCDecaux and APN Outdoor, and OohMedia with Adshel," Mr Papps said.

"They've transitioned to digital formats easily and can now sell the same sites three or four times over ... They've also become better at data and analytics and investing in selling audience segments rather than selling locations," he said.

The majority of sectors in the media industry, with the exception of newspapers and magazines, were expected to grow overall by 2023.

*click here for full article and multimedia

(The Sydney Morning Herald)