Australia’s enthusiasm for online streaming services like Netflix is showing no sign of slowing as new research suggests almost a million pay-TV subscribers are considering abandoning Foxtel.
Nearly one in three signed up Foxtel users (31.3 per cent) say they are thinking about cancelling their subscriptions for online content providers like Netflix and Stan, according to data from online survey company Pureprofile.
The arrival of the new streaming services has led to strong comments from Foxtel CEO Richard Freudenstein.
“Netflix has absolutely no cultural investment in Australia. They don’t employ Australians and have little interest in promoting Australian content,” Mr Freudenstein said in March.
The research suggests Foxtel’s saving grace might be the range of sporting coverage it offers and primetime TV programming it provides. The research shows 35.8 per cent of male subscribers will hold onto their Foxtel accounts for the sports coverage.
The data shows that Netflix users are the younger generation, with uptake dominated (55.55 per cent) by the 18-35 age bracket.
The survey also noted Netflix’s brand recognition has reached 73.7 per cent in Australia while Foxtel, a 20-year-old service, sits just ahead at 83.7 per cent.
Foxtel saw this coming
On the eve of Netflix’s official release into Australia, news.com.au – published by News Corporation which part-owns Foxtel – wrote that Foxtel “has a three-pronged attack to combat the American service from stealing its territory”.
This includes its own streaming service Presto, the launch of the iQ3 Box and keeping subscribers with its sport offering.
Foxtel saw the streaming competitors coming and told Gizmodo that it had anticipated that for at least five years.
Foxtel claims it has had more than “500 people in 11 countries” working on the iQ3 box and other streaming additions, like Presto, to fight services such as Netflix.
In September 2014, Foxtel slashed the price of its base subscription package by half.
Has Foxtel no more room to improve?
But that does not mean Foxtel is safe from the streaming invasion when price point is considered.
“Paying $10 a month to view entire series or movies at a time of your choice sounds a lot more appealing than paying $50 or more a month to watch it when it’s broadcast,” wrote Lifehacker.
There are also fears for Foxtel’s competitive advantage on sport due to anti-siphoning law loosening looking unlikely.
It has been lobbying the government to be allowed to bid for more premium sporting events which it currently can’t – like the Olympics and the World Cup – but Communications Minister Malcolm Turnbull told the ABC this would not happen.
Therefore, any increase in subscribers due to more sporting content may not happen.
Before the launch of Netflix in March, The New Daily wrote: “In Australia, it has been reported that around 200,000 Australians have previously subscribed to the American Netflix service.
“Around ten times that number have reportedly indicated that they either already subscribe, or intend to subscribe to the Australian Netflix service.”
Since the launch, Netflix has overtaken Foxtel as the chosen video subscription services of Australians. The American streaming service has a 39 per cent share of the market while Foxtel lost 10 per cent in that same period.
In the same report it was revealed that other streaming services Presto, Stan and Quickflix had comparatively low market share.