The Australian pay TV market delivered the highest revenue per user in the world last year, up by almost 25 percent since 2004.Research from the UK’s telecommunications watchdog, Ofcom, shows that around a third of Australian homes subscribe to pay TV, with Foxtel, the leading pay TV platform, carrying around 1.5 million subscribers alone. Ofcom’s figures show that the average subscriber provides almost $900 of revenue per year, topping the US market’s $760 average.

Australia has been slow to the uptake of video-on-demand (VoD) services as opposed to traditional pay TV mainly due to underwhelming data caps from ISPs that have made replacing TV with downloadable content unfeasible.

Australian company Video On Demand, the VoD market leader who have been in the industry for 10 years servicing hotels and households, told Channelnews that they consider themselves a completely different market to pay TV providers but declined to comment further.

Telstra has been tapping into both VoD and pay TV with its latest outing, the T-Box, which offers both VoD and Foxtel content (since it conveniently owns 50 percent of Foxtel).

Australian television (including VoD) is predominantly made up of US content, but research puts UK content into the same barrel with 54 percent of UK TV export revenue coming from the US, Canada, Australia and New Zealand.

Independent telecom researcher, BuddeComm, has spelled out how competition from international content and VoD services is putting pressure on the free-to-air sector in a recent overview of the market.

“TV stations will be forced to market themselves more aggressively due to threats from the new media sector,” says the report.

A national survey conducted by Jigsaw Strategic Research on behalf of FreeTV Australia found that, contrary to BuddeComm’s research, 25 percent of current pay TV subscribers are likely to consider cancelling or downgrading their subscription (see the full story here) because of the increased choice offered by free-to-air channels.

More to follow.