Australian online video subscriptions jump sixfold in six months: Telsyte

The arrival of Netflix, Stan, and Presto has seen the number of Australians subscribing to video-streaming services jump from 315,000 at the end of 2014 to 2 million by the end of June, according to Telsyte.

Free trials and other offers have coaxed Australians into taking up a subscription video-on-demand (SVOD) service, a report released by IT consultancy firm Telsyte has said.

As of the end of June, over 2 million Australians were using SVOD services, a sixfold increase on the 315,000 users recorded in December 2014, the report said.

Telsyte said Netflix is the number one SVOD choice, followed by Stan, Presto, and then Quickflix. Collectively, these four services represent about 90 percent of the market share.

According to research by Roy Morgan conducted last month, within a month of the launch of Netflix in Australia, 296,000 households -- not including those that had already circumvented geo-blocking -- had subscribed to the service.

By May, Roy Morgan said Netflix had leaped to more than 400,000 households, with 1 million Australians using the service. Following Netflix was Presto, with 97,000 users; Stan, with 91,000 users; Quickflix, with 43,000 users; and, in fifth place, Foxtel Play, with 40,000 users.

Despite Netflix being a clear front runner, Telsyte said that the SVOD market is highly competitive, seasonal, and unlikely to be a winner-takes-all marketplace.

The Telsyte report also said that mobile carrier partnerships will be increasingly important to SVOD service providers to help drive subscriptions, and that one in five broadband users intend to upgrade their fixed broadband due to streaming video.

Less than a month after its launch in Australia, Netflix voiced its regret over signing with iiNet and Optus to allow customers to access its service unmetered. Earlier this year, Vodafone teamed up with Stan to waive the streaming service's monthly fee.

Perth-based Quickflix recorded a first-half net loss of AU$8.6 million in December last year.

Last month, the Australian parliament passed site-blocking legislation that would require ISPs to block piracy sites, in attempt to deter Australians from downloading illegally.

The quick adoption of SVOD services by Australians follows rhetoric from both major parties that while the site-blocking laws are a good set of measures to tackle piracy, the timely availability of affordable content is key.

"When infringing sources of content are disrupted, this disruption will be most effective if Australian consumers have legitimate sources to turn to that provide content at competitive prices, and at the same time that it is available overseas," Communications Minister Malcolm Turnbull said at the time.