Netflix Australia uptake 'rapid': ACMA

OTT content and communications are continuing to grow in Australia as data downloaded over mobile connections jumped by 85 percent for the year.

Australians are continuing the trend of relying on over-the-top (OTT) services for content and communications, according to a report from the Australian Communications and Media Authority (ACMA) revealing that 53 percent of Australians used online video services in the six months to June 2015.

The ACMA Communications Report 2014-15 [PDF], tabled in Parliament on Wednesday, revealed that both OTT content services and OTT communications services are continuing to grow in popularity.

"One of the stand-out areas of change during 2014-15 has been the growing impact of over-the-top services beyond their now established communications role, reflecting the growing popularity of OTT content services," said ACMA chairman Chris Chapman.

"While traditional free-to-air and subscription television continue to dominate Australian's content viewing, this year we report that 34 percent of Australian adults watched online television or online professionally produced video content in a given week."

According to the report, 9.62 million people -- or 53 percent of the population -- watched video content online in the first half of calendar 2015, with 34 percent of Australians watching online TV weekly as of June.

"At July 2015, Roy Morgan Research estimated Netflix was in 8 percent of Australian homes, reaching 1.89 million people aged 14 and over," the ACMA report says.

"Homes with traditional subscription television (Foxtel) were also subscribing to Netflix at a similar rate -- 7.3 percent of Foxtel homes also had a Netflix subscription. This research shows the growth of Netflix since its Australian launch has been rapid, from 419,000 homes in May 2015 to 737,000 in July 2015."

YouTube continues to dominate total online video viewing, with Netflix Australia following it up. Those using Netflix US through a VPN also outnumbered the other Australian streaming services.

"In June 2015, 11 percent of Australian adults had watched Netflix in the last seven days (or 25 percent of adults who watched online video), compared with 17 percent who said they had watched professional content on YouTube in the same period," the report says.

"Less than 10 percent of adults had viewed each of the other local video-streaming services, such as Fetch, Stan, Presto, and Quickflix, in the last six months."

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Convenience, choice, and cost are the primary three drivers of OTT video services, according to the report, followed by the timeliness of being able to view shows, accessibility, exclusive content, a lack of advertisements, being able to watch on different devices, ease of use, better quality, and lastly flexibility.

As for time spent watching all media content, free-to-air TV accounted for 59 percent of the weekly average time spent watching video, while streaming and catch-up TV came in at 16 percent of time spent, just ahead of Foxtel's 15 percent.

With Ovum recently predicting streaming subscriptions to reach 4.707 million by 2019 and Netflix Australia estimated by the ACMA to now have 2.5 million users, the underlying network infrastructure is crucial in delivering services, the ACMA pointed out.

"The communications industry's ongoing infrastructure investment continues to support this internet-enabled communications environment," Chapman said.

"Over 90 percent of the Australian population can now access 4G mobile networks and the progressive rollout of the national broadband network is facilitating access to higher-bandwidth services."

Australia now has a smartphone penetration rate of 74 percent, the report says, with 13.41 million people using a smartphone as of May 2015 -- a growth of 11.1 percent year on year. Mobile phones remain at a penetration rate of 93 to 94 percent, with 20.99 million users, continuing to indicate levels of saturation.

In regards to OTT communications services -- such as Skype, Facebook Messenger, Apple iMessage, and FaceTime -- 4.9 million Australians made use of voice-over-IP (VoIP) services as of June 2015. 85 percent of the adult population used social networking and 42 percent instant messaging, with both of these increasing by 4 percentage points year over year.

Facebook Messenger is the most used communications app, with 46 percent of online Australians using it, followed by Skype, at 33 percent; Apple iMessage, at 23 percent; FaceTime, at 22 percent; Viber and WhatsApp, both at 19 percent; Snapchat, at 17 percent; Google Hangout, at 6 percent; and Line and Kik, at 3 percent each.

As a consequence of growing reliance on OTT communications and content, there has been a substantial increase of 85 percent in the amount of data downloaded over mobile handsets. Data downloaded over wireless broadband increased by 18 percent, while fixed-line broadband increased by 40 percent and dial-up decreased by 25 percent.