Can Netflix catch up with Foxtel? We asked 1,300 Australians

Posted by Chloe Olewitz on June 3, 2015

As cord-cutting becomes a trend around the world, experts project that streaming video services are poised to dominate the market. Services like Netflix are picking up steam in Australia, but can they catch up with the tried and true providers like Foxtel and free-to-air broadcast television?

We asked more than 1,000 Australians where they stand on streaming services and how they prefer to watch their favourite movies and TV shows. Our insights show Netflix could make a serious dent in the Australian market by this time next year, according to the 21.4 per cent of Aussie viewers who say they’re either subscribers, or are planning to subscribe to the service in the next 12 months.

What does that mean for the market? Here’s a breakdown of what our research found.

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The Foxtel brand resonates among Aussies
Out of all the big-name content providers like Foxtel, Netflix, Stan, Spotify, Pandora and more, Foxtel has achieved an outstanding level of brand recognition. More than eight out of ten Australians (83.7 per cent) have heard of Foxtel, and it boasts the highest subscription rate out of all its peers — one out of four Australians (26.2 per cent) says they subscribe to Foxtel.


On top of brand recognition, Foxtel does well when it comes to brand loyalty, with 68.7 per cent of Foxtel subscribers saying they’ll stick with the service instead of switching to a streaming option like Netflix, Stan or Presto. Sports coverage is the most popular draw card for Foxtel, with one in four subscribers (24.5 per cent) citing this as their main reason for staying. The wide selection of prime-time TV shows is the second most popular reason subscribers stay loyal (17.3 per cent of them say this is why they keep their subscription).

Brand awareness (May 2015)

  • 83.7% of Aussies have heard of Foxtel

  • 73.7% of Aussies have heard of Netflix

  • 48.1% of Aussies have heard of Stan

  • 39.6% of Aussies have heard of Presto 

Netflix brings big access and lower prices to the table
Netflix is already winning the streaming race in Australia, despite its recent entrance to the market. One in 10 Australians say they’re already Netflix subscribers, and 11.9 per cent say they’re planning to sign up in the next 12 months. Considering the trends of the digital age, it’s no surprise that more than half Netflix subscribers in Australia (55.5 per cent) are under the age of 35.


It’s safe to assume that Netflix and other streaming video services like Stan have their eye on the one in four Foxtel subscribers (25.2 per cent) who say they are considering switching to another service. About one third of Foxtel subscribers say they pay between $50 AUD and $75 AUD per month, so the comparatively low rates of a monthly subscription to streaming services could be a deciding factor for Australians considering making the switch.


Who wins in the content race?
If the race is to be determined purely by playing the numbers game, our figures would put Foxtel’s subscriber base at a best-case scenario 29.76 per cent of the population in a year’s time – a figure broadly in line with current market estimates. This takes into account those who currently subscribe, those who say they plan to subscribe, and those who plan to cancel.


However, if those who say they’re considering cancelling their Foxtel in favour of an alternative service actually go ahead and make the switch, the figure would be closer to 23.16 per cent penetration. Compare this with the 21.4 per cent penetration Netflix could achieve in 12 months if viewers are true to their word sign up, and the race looks a lot closer.


What consumers want
More than three in five Australians (62.7 per cent) say their priority in an ideal content streaming service would be an affordable subscription fee. But it’s also important to note that more than half of Australians (56 per cent) don’t subscribe to any content subscription services at all. And of these viewers, 46.7 per cent say they’re satisfied using free broadcast services for entertainment.


The insights highlight that consumers today want options, and Australians are no different when it comes to their streaming preferences. For any service to win in the content world, it looks like they’ll have to build an impressive and sizeable library of the newest shows and movies from premium networks, and, most importantly, make it affordable.

 

The most important features consumers
want from a streaming service
Percentage
An affordable subscription fee 62.7%
TV, movies or music with no ads 49.5%
To be able to watch/listen to content on their own schedule 35.4%
To get access to all of the content they want as soon as it's released 23.5%
Guaranteed high-quality content streaming 22.4%
To store my shows/movies/music in one place and play them back whenever they like 21.1%
To be able to watch/listen to all of the content they need from a single source 19.0%
To watch or listen to my content offline 18.7%
Streaming across all devices 12.4%
A recommendation engine that suggests new content that's uncannily accurate 3.60%
Social functions so share what they're watching/listening to 1.70%

 

The Pureprofile content consumption survey was conducted between 23 April 2015 and 2 May 2015. It was distributed to a nationally representative sample of the Australian population according to the latest Census data (2011), with a final sample size of N=1317  that was weighted to the population.

 

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