The arrival of US-based video streaming market leader Netflix will pose little threat to the viability of Australian rivals like Foxtel, Quickflix and Stan, according to a new market research study. On the contrary the researchers see the launch as a much needed fillip for Australia’s video entertainment industry which has been struggling, due to digital disruption and fast-changing consumer habits.
A greater threat will come to download sales from the likes of iTunes and JB Hi-Fi, according to the study conducted by US-based analyst firm IHS.
The research also predicts that sales of Blu-ray and DVD discs, already under pressure from online piracy and structural changes to the entertainment industry, will escape serious impact.
The study was commissioned by an industry lobby group, the Australian Home Entertainment Distributors Association (AHEDA), whose CEO Simon Bush admits the results are surprising.
“It’s unclear how the market is going to shake out this year, but the research suggests that streaming is not going to dramatically impact physical DVD sales,” Bush said.
The study notes that Australia’s Internet infrastructure has reached a standard capable of carrying over-the-top on-demand and streaming video services.
Over-the-top, set-top-box plays include TiVo, Telstra’s T-Box and FetchTV. Online streaming video services include Quickflix, Foxtel’s Presto (a move widely seen as a hedge against Netflix) and most recently, the Stan service operated by Fairfax Media and Nine Entertainment.
Free-to-air broadcasters can also take heart from the research. It found that while Netflix could take a small bite out of average daily TV viewing time, it is unlikely to affect the sector’s overall audience.
Foad Fadaghi, MD of digital consumer specialist firm Telsyte, believes that Netflix Australia poses little threat to local streaming providers.
“Our research has shown that consumers are quite likely to have multiple SVoD subscriptions. They will have them for different content types, depending on the content rights structures that are in place,” Fadaghi said.
