At the end of May 2015, just a few short months after arriving in Australia (officially anyway), Netflix had signed up an impressive 1 million Australians in 408,000 households.
Well, at the end of June, the subscription video on demand (SVOD) service has added another 400,000 Australians. Netflix is now live to 1.42 million of us in 559,000 homes and has soared past potential rivals in Stan, Foxtel’s Presto and Quickflix Limited (ASX: QFX).
Back in May, Netflix had 10x the number of subscribers compared to its nearest rivals Presto and Stan in May according to Roy Morgan (see chart below), and has likely increased that again in June.
Internet service providers Optus and iiNet Limited (ASX: IIN0 were the first to offer Netflix to their broadband customers, with TPG Telecom Limited (ASX: TPM) and M2 Group Ltd’s (ASX: MTU) Dodo and Primus following.
Telstra has reportedly not considered offering any Netflix deals to customers – perhaps conflicted by its half-ownership of Foxtel and Presto, but the giant telco is likely to be under pressure to do so – or face losing customers to its rivals. Telstra still boasts the highest number of Netflix-connections – as the chart below shows, despite just 5.2% of broadband customers signing up for the service.
Interestingly, 9.6% of those homes with National Broadband Network (NBN) connections have Netflix. NBN is the superfast broadband network designed to deliver amazing internet speeds to Australian households.
The streaming giant’s dominance in such a short period could be starting to have an impact on the free-to-air commercial broadcasters too. We’ve written about this a few times, but I won’t go over it again except to highlight that investors might want to pay close attention to the performance of Seven West Media Ltd (ASX: SWM), Ten Network Holdings Limited (ASX: TEN) and Nine when they report results in the next few weeks.
Australian media companies were too slow to roll out their own SVOD offerings to counter the arrival of Netflix, despite knowing for months about threat, and are now paying the price.