Subscription video-on-demand (SVOD) is poised for steep growth through to 2019, however pay TV and free-to-air TV are expected to survive, according to Ovum.Ovum has forecast that SVOD subscriptions will rise from 270,000 in December last year to 4.707 million by the end of 2019.
“SVOD services have been growing rapidly in Australia since the entry of Netflix in May this year,” Ovum research director David Kennedy commented. “This has sparked strong competition from the Australian incumbents – the free-to-air and pay TV industries – that is driving take-up.
Ovum does not expect
cannibalisation of existing pay TV or free-to-air subscriptions,
however states that “there will be pressure on profitability as
competition for content pushes up the cost of licensing”.
“SVOD, pay TV and free-to-air are distinct consumer propositions that meet different needs,” Kennedy commented. “We expect SVOD to grow fast, but we also expect pay TV to maintain its dominance of sport and for free-to-air to remain popular because, well, it’s free.
“Consumers will mix and match these different services”.