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Netflix Still Gaining Ground But Growth Slowing

Netflix Still Gaining Ground But Growth SlowingRoy Morgan has found that 855,000 homes (9.3 per cent) now have Netflix, making up over 2.2 million people 14+ with access to the streaming service.

However, for the first time since Netflix’s local launch, the rate of growth slowed during August. Netflix gained 118,000 subscribing homes last month, having previously grown by 133,000 homes in May, 152,000 in June and 166,000 in July.

Roy Morgan Research general manager – media Tim Martin noted the figures suggests Netflix is on track to reach one in 10 Australian homes in September, surpassing the one million mark by October. Meanwhile, Stan and Presto are each in less than 1 per cent of homes.

“Netflix made such a giant splash in the Australian subscription video-on-demand market, it was inevitable that the initial flurry of subscriptions among the core market would settle down – if by that we mean gaining ‘only’ 118,000 subscribing homes in a month,” Martin commented.

“Some of this lower net monthly growth would also be due to homes discontinuing after the trial offers expire, or when they’ve watched about as much of the available content as interests them.

“The ‘no contract’ model means Netflix and other SVOD players, including Stan and Presto, need not only to attract but retain subscribers, who can effectively come in and out depending on when new shows or movies are loaded.”

The are still opportunities for players in the market, with different demographics still to join in on the subscription video-on-demand rush.

“The main opportunity for SVOD providers is now to reach beyond the ‘low-hanging fruit’ of early adopting younger households that have driven initial growth,” Martin commented.

Martin noted Telstra TV is scheduled for release in October, with older, established households representing a potential growth area.

“This enormous pool of potential customers is uncertain about SVOD now, but they’ll soon see in their own homes how easy it is to access just by plugging in a Roku,” he commented.

“Once subscribed, these customers will also be less likely to switch or discontinue whenever a shiny new service comes along. The rewards for staking a claim in this area are clear.”