Is Netflix serving Australia sizzle or sausage?
Advertising from local competitors aside, Netflix appears to be dominating Australia’s VOD market just six months after launch.
Australian advertising is renowned for its humour, rather than its subtlety, as was perfectly demonstrated in a recent ad for Foxtel’s streaming service Presto, starring Naomi Watts.
In the one-minute spot, Watts flounces into frame, flanked by her entourage, and claims there is only one time she acts like a diva – “when an on-demand service from America tries to serve us Aussies all sizzle and no sausage!”
While local media was quick to point out that LA-based Watts has probably never watched Presto in her life, the thinly-veiled reference to Netflix highlights the convulsions that have been rocking Australia’s media market since the US streaming giant launched there in March.
Indeed, almost a year before Netflix’s arrival, local media companies were madly forming joint ventures and alliances to ready themselves against its impact. During this period, broadcaster Nine Entertainment Co (NEC) teamed with Fairfax Media to launch streaming service Stan, which has rights to the Breaking Bad spin-off Better Call Saul. NEC also bought HBO’s stake in Quickflix, another streaming service launched by a group of local investors in Western Australia in 2003.
In addition, pay-TV operator Foxtel teamed with broadcaster Seven West Media on Presto Entertainment, which streams local and international TV content, including HBO programming, and is run separately to Foxtel’s existing Presto Movies service.
In August, another local service, Ezyflix, became the first casualty of the streaming wars when its parent company Access Digital Entertainment announced that it was shutting the service down. The closure didn’t bode well for the digital ownership model in Australia as EzyFlix offered films and TV shows on a rental or electronic sell-through basis rather than selling monthly subscriptions.
All this maneuvering leaves Netflix battling local services Presto, Stan and Quickflix and apparently doing quite well. In June, local media research company Roy Morgan Research reported that Netflix reaches more than 1 million Australians (users rather than subscribers) compared to Presto with 97,000 users, Stan with 91,000 users and Quickflix with 43,000 users. Even before the official launch, it was estimated that 200,000 Australians were subscribing to Netflix’s North American service by masking their IP addresses via a VPN.
In an attempt to differentiate itself from the competition, Quickflix has said that it intends to shift its focus towards distributing content into China and bringing Chinese content to the rest of the world. It also announced that it was planning to acquire a Shanghai-based film and TV company, but recently withdrew from that deal, citing Chinese regulations and other issues uncovered during the due diligence process.
Although Foxtel is technically cannibalising its own pay-TV services with Presto, it may have the upper hand in the streaming battle due to its content line-up, which includes Australian shows such as Wentworth, Satisfaction and Love My Way and HBO content including The Sopranos and Boardwalk Empire.
But at this point in the game, it does look as if Australia will have to produce a lot more sausage to keep Netflix at bay.