Streaming services booming as Australians sign up to digital entertainment: Deloitte

Australians are signing up to paid digital subscription services in droves, which has resulted in the downloading of content soaring during the Covid-19 pandemic.

Foxtel chief executive officer Patrick Delany has seen huge growth in Australians signing up to streaming services during the Covid-19 pandemic. Picture: John Feder

Four out of five Australian households now have at least one paid digital entertainment subscription, and most have more than two, according to Deloitte’s annual media consumer survey.

The report, which relied on responses from more than 2000 people across the country, found the average Australian household has 2.3 TV/movie streaming subscriptions, with younger people the heaviest consumers.

“While digital entertainment subscription services have been on a continued growth trajectory for some time, the Covid-19 lockdown effect cemented their place in our households – 80 per cent of our ­respondents’ households have a paid digital entertainment subscription of some sort, with an average monthly spend of $55,” the report says.

Deloitte’s national media sector leader and partner Leora Nevezie said digital entertainment subscriptions – which included streamed TV, movies and sport, as well as music and gaming – were no longer just considered “nice-to-have”.

“Younger generations lead the way – 95 per cent of all Gen Z (14-24-year-olds) have at least one paid digital entertainment subscription service, closely followed by 93 per cent of millennials (25-38), and 60 per cent of both Gen Z and millennials have more subscriptions now than a year ago,” Ms Nevezie said. “We are well and truly in the age of the entertainment subscription – but how many can we have before both the experience and our budget break?”

About three in five respondents (58 per cent) expressed concern about the costs of multiple services, echoing recent warnings by some media industry heavyweights that not all recent entrants to the streaming market in Australia would survive.

News Corp Australasia boss Michael Miller said in May it was “unsustainable” for industry to expect households to continue to invest in subscription services.

“You could see some consolidation or rationalisation, you could see some exits, you could see some closures. It’s an uncertain future,” he said.

In May 2020, Foxtel launched popular streaming service Binge and its subscriber base has soared – it grew from 80,000 subscribers at June 30 last year to increase by 933 per cent to 827,000 subscribers by the end of June this year.

Foxtel’s streaming sports service Kayo grew in the same period from 465,000 to 1.079 million subscribers.

Netflix remains the market leader – Roy Morgan figures showed at the end of 2019 the service had more than 11.9 million Australian subscribers.

The Deloitte report also notes the “convergence in the pay TV space”, with subscription streaming services offered as both an ­online extension of traditional subscriptions as well as stand-alone offerings.

“Services like Foxtel Go and Foxtel Now serve as over-the-top streaming access to ‘traditional’ Foxtel services.

“We have also seen Netflix become readily available on Foxtel set-top boxes,” it says.

“With 71 per cent of pay TV audiences also holding a TV/movie streaming service subscription, and 25 per cent also holding a sports streaming subscription, our survey backs up that this convergence is a logical move.

“The combination of traditional pay TV and newer streaming services gives Foxtel a stronger entertainment ecosystem to attract new audiences and cross-sell once they are on board.”

The report also found most media consumers valued “trusted news sources” more highly than before the onset of Covid-19.

“Trust in the news source and quality of news content continue to be major factors in enticing paid news subscribers,” it said.

“The last 18 months have further heightened our expectations on trust and quality of news content across all generations, with 56 per cent of respondents saying they value trusted news sources more highly than before the pandemic.

“This was even higher for the potentially lucrative millennial (63 per cent) and Gen Z (57 per cent) target markets.”