Aussie Online Video Popularity Has Market Set To Soar

While uptake of local over-the-top (OTT) subscription video-on-demand (SVOD) services from providers such as Quickflix is modest, and while global players such as Netflix have yet to formally enter the Australian market, Frost & Sullivan expects more local and international providers to enter the OTT SVOD market in 2015.

Among recent developments, Foxtel has launched its Foxtel Go and Foxtel Presto services, while Google recently launched its OTT Chromecast device in Australia, Frost & Sullivan notes.

Approximately 11.6 million Australian internet users aged 15 to 65 have watched online video in the last six months, representing a percentage of 83 per cent, up from 68 per cent in 2012, according to the report, with Australians increasingly using mobile devices to access video content.

The percentage of Australians aged 15 to 65 who have watched a video at least once a month on a smartphone has increased from 34 per cent in 2013 to 51 per cent in 2014, while on tablets the percentage has increased from 29 per cent to 47 per cent.

Of the content viewed on mobile devices, news is the most popular, with 21 per cent of consumers watching it on most days and a further 24 per cent watching it at least once a month on average, while there is gaining popularity in live broadcast programs such as sports and news.

In turn, online video advertising is experiencing rapid growth.

For the 12 months to June 2014, the online video advertising market grew by 60 per cent, following growth of 55 per cent in the year prior, Frost & Sullivan found, with the market predicted to grow from $198 million in 2014 to $780 million in 2019, with growth rates tapering off as the market matures.

Phil Harpur, Frost & Sullivan senior research manager, Australia & New Zealand ICT Practice, observed there are several factors stimulating consumption of online video in Australia.

“There is a higher and growing proportion of longer form content of all online video content watched, and a growing proportion is premium content such as movies or TV shows,” Harpur commented.

“Viewing patterns are being aided by improving data allowances from internet service providers, and a greater range of content availability from subscription video-on-demand (SVOD) providers.”

Harpur added online video content is “now a core part of the strategy of many online publishers from both a content and advertising perspective”.

“Local online news sites are incorporating more online video content, and those produced by online publishers such as Fairfax Media and Yahoo!7 continues to evolve,” he stated.

“However, there is still a lack of locally produced ad-funded content: a key reason Australians view the majority of popular video content, like music, gaming, sports and movies, from overseas websites.”