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Netflix Australia reaches 2.5m users: ACMA

The Australian media regulator has published a report stating that 3.2 million Australians are using streaming services, with 2.5 million of these subscribing to Netflix Australia.

The Australian Communications and Media Authority (ACMA) has released a snapshot report of the streaming industry in Australia, reporting that 3.2 million Australians, or 17 percent of the population, consumed streaming services during the six months to June 2015, and 2.2 million in the last seven days prior to June.

The ACMA estimated that as of June, 2.5 million Australians are users of Netflix Australia.

The industry regulator's sample size for its snapshot report consisted of 1,505 Australians over the age of 18 between May and June 2015, asked whether they used IPTV services during the six months to June 2015, and in the seven-day period just prior to June 2015.

Of those who use streaming video-on-demand (SVOD) services, 78 percent used Netflix in the six-month period, and 88 percent in the seven-day period.

The ACMA also reported that those who are aged 18 to 34, are full-time workers, have a degree, live in a household with children, have an income of AU$100,000 or more, and own an Apple TV have a higher likelihood of using streaming services.

One-third of those aged 18 to 34 use streaming services, with this statistic dropping to just 11 percent for those aged over 35. Over half of all streaming users -- 58 percent -- are aged between 18 and 34.

Streaming subscribers consume an average of eight hours of content each week, with those aged 18 to 34 averaging 9.9 hours, while users aged 35 and over watch only 5.2 hours per week. Over the seven-day period to June 2015, 44 percent of subscribers spent more than five hours consuming content.

Being able to consume content in a timely manner was listed by 49 percent of respondents as the main benefit of using streaming services, with greater choice the second-highest reason, listed by 44 percent, and lower cost coming in third, at 21 percent.

Content was streamed across televisions for the most part, with 59 percent using the TV over the seven-day period, followed by 41 percent on a desktop or laptop, 21 percent on a tablet, and 12 percent on a mobile phone.

In terms of quality, 78 percent of those using streaming services were satisfied, with 40 percent very satisfied, and 38 percent somewhat satisfied. However, 55 percent also reported experiencing technical difficulties in streaming content during the seven-day period.

Globally, Netflix in April recorded a total subscriber base of 62.3 million, with 40 million located in the United States.

Netflix has yet to release any results from its operations in Australia, but Roy Morgan released statistics in May stating that 1 million Australians were using the service. Should these numbers have been accurate, Netflix gained 1.5 million customers in Australia within one month.

Australian streaming company Quickflix has been conversely haemorrhaging customers, losing another 12,076 customers in the three months to September 30, down to just 109,051 customers. It attributed its customer losses to the launch of Netflix in Australia and New Zealand, particularly because of deals with telcos Optus and iiNet to offer unmetered access to Netflix.

Government regulatory bodies are beginning to recognise the changes that streaming services have made to the traditional broadcast television industry; last week, the ACMA announced the registration of a new Commercial Television Industry Code of Practice.

The new code was written mainly in response to how IPTV has affected complaints handling, privacy, advertising, content programming, and classification.

The government has also revealed draft exposure legislation that will see GST added to all digital products and services purchased online by Australians from mid-2017.

"This change will result in supplies of digital products, such as streaming or downloading of movies, music, apps, games, ebooks, as well as other services such as consultancy and professional services, receiving similar GST treatment whether they are supplied by a local or foreign supplier," the explanatory material [PDF] for the exposure draft says.

"When the GST was introduced in 2000, such transactions were relatively unusual, especially for consumers. However, cross-border supplies now form a large and growing part of Australian consumption.

"The growing importance of these types of transactions has highlighted the fact that the GST system was designed with a focus on Australian-based, rather than cross-border supplies ... This harms the integrity of the GST tax base and can disadvantage local suppliers."

There is still much to be done, however, with National Broadband Network (NBN) chair Ziggy Switkowski arguing on Monday that the advent of SVOD has rendered cross-media ownership laws "obsolete", and the ACCC saying that streaming has gone beyond the scope of competition laws, with legal and policy framework needing to catch up to innovation.