Despite cost-of-living pressures, Subscription Video on Demand (SVOD) services increased by 4 per cent year-on-year to reach 25.3 million in June 2024
SYDNEY, AUSTRALIA – The Australian entertainment subscription market, which includes video, music and game services, grew by 5 per cent to 52.3 million services in the 12 months to June 2024, despite cost-of-living pressures and services’ increasing focus on profitability, according to new research by emerging technology analyst firm Telsyte.
The Telsyte Australian Subscription Entertainment Study 2024 found despite a stronger impact of cost-of-living pressures entertainment subscriptions remain essential to Australians, with around half of SVOD and streaming music users considering their services vital in meeting their entertainment needs. Amongst video game subscribers, this figure rises to 58 per cent for hardcore gamers who play for more than 3 hours daily.
The study indicates the market is maturing, particularly in SVOD services, where most (over 70%) subscribers now have more than one service. Growth rates are in single digits: SVOD (4%), streaming music (9%), and games-related subscriptions (6%). Streaming music's higher growth was boosted by the launch of TikTok Music during this period.
Ad-supported plans driving SVOD growth
SVOD continues to grow in a mature market and the total number of Subscription Video on Demand (SVOD) services grew by 4 per cent year-on-year, reaching 25.3 million in June 2024.
Subscriber growth is attributed to a population increase, the introduction of more affordable ad-supported plans, and strong consumer interest in diverse content across multiple services. Revenue growth was driven by subscription cost increases and increased service adoption.
Netflix remains the clear leader with 6.2 million subscriptions at the end of June 24, followed by Amazon Prime Video (4.8 million); Disney+ (3.1 million); Stan (2.6 million); Paramount+ (1.8 million); Kayo Sports (1.6 million); and Binge (1.6 million).
The long tail of smaller services (below 1 million subscriptions) collectively increased by 1 per cent, driven by consumer interest in diversified content at affordable price points, sometimes under $10 per month.
Among all services above 100,000 subscriptions, BritBox saw the fastest growth in FY2024. Anime-focused Crunchyroll and reality TV-focused Hayu also showed strong performance.
Excluding dedicated sports services that serve ads during live sports broadcasts, Telsyte’s research found there are some 2.5 million SVOD subscriptions subsidised by advertisements (June 2024), up from around million a year ago. Ad-supported subscriptions now account for 11 per cent of the total SVOD services.
Offered by Netflix, Binge and Paramount+, ad-supported plans are the most affordable base tier and come at a time when consumers are increasingly tightening their wallets.
This growth is set to continue as the study found consumers are increasingly receptive towards having advertisements on their SVOD services if it can help subsidise the subscription cost. Close to 1 in 2 (45%) of SVOD users are interested in such a plan, a sharp 9 per cent increase from a year ago.
Telsyte estimates the introduction of more ad-supported plans could potentially lift the average number of subscriptions per household closer to 3.7 (currently 3.4) by 2028.
While demand for video subscription entertainment remained strong, paid SVOD services rank 8th among areas where consumers had reduced spending in the last 12 months, compared to 10th a year ago, according to Telsyte’s consumer spending insights.
More competition here as cost-of-living pressures hit SVOD
SVOD services remain an important part of Australians’ video entertainment mix with over half (53%) of SVOD subscribers Telsyte surveyed indicating they continue to discover interesting new content and 45 per cent are comfortable paying for multiple services.
However, the study among those willing to pay for streaming video services, the average monthly budget has marginally declined by 2 per cent to just under $36, adding to last year's 7 per cent increase. The hardest hit consumer segments that saw their SVOD budgets reduced the most are young families and individuals with a medium income.
The study found the SVOD market revenue (excluding advertisements) reached an estimated $3.5Bn for FY2024, a 15 per cent year-on-year increase driven by cost rises and increased service adoption.
Depending on the plan, the retail costs of top SVOD services have increased between 10 and 67 per cent since June 2020, impacting the affordability of accessing services.
The increasing costs highlight the potential interest in bundling multiple services to save costs, with nearly half of SVOD users claiming they will consider subscribing to new services if they come with a bundled discount with services they are already paying for.
“While Ad-subsidised SVOD subscriptions have been driving market growth, SVOD providers are entering the end of the peak growth cycle”, says Telsyte Managing Director Foad Fadaghi.
Australians are also allocating more time for free and ad-supported streaming services due to the rising cost of living, with 40 per cent (up 8% y-on-y) claiming they are relying more on free services due to budget constraints.
According to Telsyte’s research, the average total weekly video entertainment consumption increased by 4 per cent year-on-year to 47 hours, driven by free sources such as BVOD, YouTube and videos on social media.
Notably, social media video platforms such as YouTube and TikTok continue to be popular among Australians. Telsyte estimates over a million are subscribed to YouTube Premium, the paid version of YouTube, highlighting the demand for niche and user-generated content.
Broadcasting Video On Demand services (BVOD, incl. 7Plus, 9Now, 10Play, ABC iView and SBS On Demand) remained popular and most BVOD platforms had more than 11 million viewers during FY2024. The research also highlighted the increased usage of 9Now during the 2024 Paris Olympics.
Additionally, nearly five million Australians claim they have used Free and Ad-supported streaming TV (FAST) services or services that offer FAST channels in the last 12 months.
The FAST market has quickly expanded over the last 24 months, with services such as Samsung TV Plus, LG Channels and Plex. Dedicated fast channels can also now be found on all of the BVOD services and Fetch’s platform.
SVOD’s next level: Immersive technologies for video entertainment
Traditional video entertainment is on the cusp of a revolutionary transformation, driven by an increasing adoption of immersive technologies that will redefine the entertainment experience.
Telsyte's projections indicate a potential surge in xR headset usage among Australians driven by better technologies that target the entertainment audience; increasing availability of content and applications; as well as popular brands such as Apple Vision Pro entering the market.
Telsyte estimates the number of xR headsets adopted by Australians is expected to more than double from around 1.5 million in 2023 to almost 3 million by 2028.
As spatial computing gains popularity, the potential for dedicated immersive spatial entertainment subscriptions and enhanced viewing experiences within existing platforms is high.
Telsyte’s research found consumer interest in xR applications is primarily driven by video games and video-related entertainment, including sports, movies, and 3D-format entertainment.
Multi-view capabilities for simultaneous content consumption (e.g. sports games); the resurgence of 3D movies; and immersive live experiences such as concerts and sporting events are just a few examples of the exciting possibilities on the horizon.
"Immersive technologies can be a catalyst for future growth in the SVOD market," says Telsyte Senior Analyst Alvin Lee.
Telsyte estimates the total number of SVOD subscriptions could reach over 30 million by June 2028, driven by robust content pipeline; potential new market entrants such as HBO Max; increasing availability of ad-supported plans across numerous services; and more immersive video experiences.
Demand for local content and production remain strong
The study highlighted significant interest in Australian content on SVOD platforms in the past year, and two in three (64%) Australians claim they have watched Australian-related content on SVOD during that time.
Drama, documentaries and comedy content were among the most popular categories, with more than half (56%) say they want to see more on these platforms.
Half of subscribers still believe it is important to have content that has Australian stories, voices, culture and values on SVOD services. Additionally, 37 per cent of Australians say they are more likely to tune in if the video content is about Australia or is an Australian production.
As generative AI continues to gain popularity in Australia, the study found consumers have growing concerns over the use of the technology to produce video content.
More than half (56%) do not believe generative AI can replace human screenwriters in creating captivating, distinct storylines of interest (up 5% y-on-y). Additionally, Australians show strong support for the local production industry, with 57 per cent saying the use of generative AI-produced material should be regulated in the sector.
There is also strong support for proposed changes to anti-siphoning laws, as 60 per cent of SVOD users say access to free sports via streaming should be guaranteed for Australians.
New services and population growth lifting streaming music subscriptions
Streaming music reached 18 million subscriptions at the end of June 2024, an increase of 9 per cent from previous year, driven by population growth and the launch of TikTok Music.
The top 3 streaming music service providers in Australia remain Spotify, Google (incl. YouTube Music and those using YouTube Premium for music listening) and Apple Music. Listenership on Amazon Music is also growing steadily as part of Amazon Prime subscriptions.
In addition to music, the study found that interest in audiobooks continues to grow steadily with over 1.5 million users as of June 2024. Audible and Spotify are the top two platforms Australians used to stream or download audiobooks.
Games related subscriptions maintain modest growth
Australians held over 9 million games-related subscriptions at the end of June 2024, a 6 per cent increase from a year ago.
Microsoft’s Xbox Game Pass remains the leader across all types of games-related subscriptions that Telsyte measures as consumers continue to gravitate towards the all-you-can-play subscription model.
Interest in cloud gaming remains high with over a million adopting services such as Microsoft’s xCloud and GeForce Now. GeForce Now saw the strongest subscription growth across games-related subscriptions during this period.
For further information on the study or media enquiries contact:
Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au
Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au
The Telsyte Australian Subscription Entertainment Study 2024 is a comprehensive study which provides subscribers with:
Market sizing and forecasts of the Australian entertainment subscriptions market, including video, music and games
Insights into consumer attitudes and technology adoption trends
Uptake, intention and detailed analysis of
Video services including: SVOD, pay TV and BVOD services
Streaming music services
Games-related subscription services
Service and content consumption preferences
Insights into the future of entertainment subscription services in Australia.
In preparing this study, Telsyte used:
An online survey conducted in August 2024 with a representative sample of 1,085 respondents, 16 years and older.
An online survey conducted in May 2024 with a representative sample of 1,050 respondents, 16 years and older.
Interviews conducted with executives from SVOD, Pay TV and video game service providers, content providers, funding agencies and hardware manufacturers.
Financial reports released by service providers and media companies.
On-going monitoring of local and global market trends.
Editor’s note:
Nine's reporting methodology for Stan changed in FY24, now focusing solely on paid subscriptions. Free trials were also discontinued in June 2024. The reported 2.6 million subscriptions includes Telsyte's estimates of remaining trial subscriptions at the end of June 2024. Nine's new reporting shows Stan's paid subscribers increased from 2.2 to 2.3 million during this period. This context is crucial for accurate year-on-year comparisons and understanding Stan's market position.
Telsyte actively monitors the SVOD services market, including over 40 SVOD services. Other examples include Apple TV+, BritBox, Crunchyroll, Foxtel Now, Hayu, Optus Sport and etc.
The measure is the number of subscriptions at the end of June 2024 (snapshot), not usage/utilisation. Content releases will influence the number of subscriptions when measured at different points in time.
Telsyte measures Amazon Prime Video as a subset of Amazon Prime – with measured subscribers self-reporting their use of the video service.
Telsyte measures the hours that consumers spend on consuming all types of video content. Examples include FTA TV, SVOD, social media videos, BVOD, FAST services etc.
FAST channels are curated scheduled channels that feature specific programs, genres or themes and offer an improved viewing experience of linear TV channels (e.g. a channel that is dedicated to ‘MasterChef’ or ‘shows from the 70s’). Examples of services that offer FAST channels include Samsung TV Plus, LG Channels, 7Plus, 10Play).
About Telsyte
Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC Technology. For more information visit www.telsyte.com.au
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