Online video content (OVC) services are expanding Australians’ entertainment options. Consumers, whose viewing habits were once determined by broadcast schedules and ratings seasons, now take advantage of the multiple on-demand video services to view TV and film content at any time and place convenient to them.
While broadcast television remains the main entertainment medium, we have become keen users of OVC services—at May 2014, 52 per cent of Australia’s adult internet users had viewed TV programs or feature films online. There are now a number of new and soon to arrive OVC services in Australia, including Netflix, Stan, and an expanded Presto Entertainment, suggesting 2015 may be a year of change for the Australian content market.
The ACMA has undertaken this research to gather intelligence on the increasingly competitive OVC sector, a market that has the potential to significantly change Australia’s broadcasting and entertainment landscape. To that end, it is intended to provide a snapshot of the current state of the market and to provide a baseline measurement of consumer behaviour upon which to build in the future.
This report focuses on professionally produced long-form video content that is provided over a broadband internet connection or mobile network such as subscription IPTV services, over-the-top (OTT) services, and catch-up television and film services. The online delivery of short-form clips, user-generated content such as YouTube clips and other material (e.g. peer-to-peer file sharing) is not covered in this snapshot.
TV one of many screens
Whether they’re watching broadcast or online content, viewers are building their own content library using different services, devices and networks (Figure 1). For example, an individual can view an ABC television program through a scheduled television broadcast, the ABC television catch-up service or a different online content delivery service via computer, tablet or phone.
Figure 1 Consumers view content in a range of ways
Source: ACMA, Six emerging trends in media and communications, November 2014.
Nonetheless, the television set remains the main device on which Australians watch video content. Data from 2014 shows that even younger adult viewers, who spend more time on alternative screens than do older viewers, still spend more time on TV screens than anything else (Figure 2).
Figure 2 Time spent (hours:minutes) in a month viewing video on different devices (quarter 3, 2014)
Figure 2 (.csv) Time spent (hours:minutes) in a month viewing video on different devices (quarter 3, 2014)
Base: TV and PC/Laptop figures = Australians aged 2+; Mobile phone and Tablet figures = Australians aged 16+.
Source: Nielsen, Australian multi-screen report Quarter 3 2014, p. 7.
When it comes to online viewing, a desktop or laptop computer (67 per cent) or an internet-enabled television (49 per cent) are the preferred devices (see Figure 3). Mobile devices are becoming increasingly popular—especially tablets, which one in four consumers use for OVC access.
Figure 3 Devices used to access OVC
Figure 3 (.csv) Devices used to access OVC
Base Australians aged 14 years and over.
Source: Screen Australia, Online and on demand: Trends in Australian online video use, 2014.
The preferred device for accessing OVC also varies according to the viewer’s age, with Australians aged 16–24 years far more likely than older consumers to view video content on a mobile phone or tablet. In 2013–14, 82 per cent of ABC4Kids iview content was viewed using a mobile device.
Global data published by Ooyala has recently reported that our choice of viewing screen varies according to the content we watch, with a strong relationship between video length and screen size. Televisions are favoured for viewing films, while small-screen devices are most commonly used to watch shorter programs. The study found that people accessing content through a desktop computer or mobile devices were more likely to watch shorter online videos (those of 60 minutes duration or fewer), while those viewing content on an internet-connected television were more inclined to watch longer-form content such as feature films.
While there are multiple avenues to access content in Australia, viewers are still spending most of their time watching television content at the time of broadcast. Figure 4 shows the high take-up and consumption of live broadcast television compared with other services, including time-shifted content and catch-up services.
Figure 4 Take-up of selected content services (%) and average weekly use in hours
Figure 4 (.csv) Take-up of selected content services (%) and average weekly use in hours
‘Time-shifted TV’ is broadcast TV recorded to be watched at a later time. ‘Catch-up’ refers to official TV on-demand or catch-up services.
Source: Nielsen, Australian Connected Consumers 2014, Australians aged 16 years plus.
Live broadcast television has the highest take-up among online Australians and the highest average weekly use. In 2013, 86 per cent of online Australians aged 16 years and over watched TV compared with 37 per cent watching time-shifted television and 31 per cent watching catch-up. Online Australians spent an average of 14.7 hours per week consuming live television, compared with 7.8 hours for time-shifted television and three hours for catch-up services.
What’s on offer and who is providing it?
There are five types of OVC providers in Australia:
- free-to-air (FTA) broadcasters
- subscription broadcasters
- internet service providers (ISPs)
- consumer electronics companies
- OTT content service providers.
Table 1 outlines the different types of services these providers offer.
Table 1 OVC service types
*Catch-up: content provided in catch-up services includes recently broadcast material and may include some material that has not been previously broadcast; HbbTV: Hybrid Broadcast Broadband TV is a service in which digital free-to-air broadcasting and internet television are transmitted via a set top box. IPTV: Internet Protocol Television.
Source: Provider websites.
FTA broadcasters expanding beyond catch-up
All FTA broadcasters in Australia now provide a catch-up service that offers recently screened content, and most also offer catalogues of past programs and feature films. Content is typically available over a broad range of platforms and access devices (Table 2), with simple, one-click apps allowing site visitors to search for and play content at the touch of a button. User accounts enable viewers to plan their viewing well in advance and provide consumer-specific information to the content provider, and potentially, its advertisers.
Table 2 Australia’s FTA catch-up services—platforms and user apps at a glance
*iOS devices only.
Source: Provider websites.
ACMA consumer research indicates that almost half of Australia’s internet users (44 per cent) have accessed catch up television. Launched in 2008, ABC’s iview was the first Australian catch-up service. It is the most popular catch-up website (Figure 5), with the iview service having 19 million program plays a month during 2013–14—double the number in 2011–12.
Figure 5 Percentage of catch-up users who visit the following web sites
Figure 5 (.csv) Percentage of catch-up users who visit the following web sites
Note: 9jumpin data collected from January 2014 onwards; TENplay figures refer to the TENplay homepage, which includes content other than catch-up, such as program information, links to competitions and that night’s broadcasting schedule.
Source: Roy Morgan Single Source, Australians aged 18+, Jun 2013 – Jul 14, Australian aged 18 +.
Broadcasters are now expanding their OVC services. In September 2014, Australia’s FTA channels launched Freeview Plus, a free service that uses the HbbTV standard to stream both catch up and scheduled television content over the internet. While initial take-up may be limited by the relatively low number of HbbTV-ready devices available and sold in Australia, the availability of this service may further encourage consumers to view television content delivered via broadband.
Several broadcasters have formed joint ventures with content providers and media organisations for online content delivery. For example, on 26 January 2015, Channel Nine launched its subscription-based streaming service, Stan, in a joint venture with Fairfax. Channel Seven has recently joined forces with Foxtel to offer subscription services under the Foxtel Presto brand.
Subscription broadcaster offers a range of OVC services
Foxtel, Australia’s dominant subscription broadcaster, offers a range of services over broadcast and broadband networks, both within the subscription and pay-per-view formats. Foxtel is continuing to invest in its online business, securing exclusive content deals for its most popular programs. As mentioned above, together with the Seven Network Foxtel has announced the launch of a broadband-only service under the Presto Entertainment banner in 2015.
Table 3 Subscription OVC services
*Compatible devices include internet-connected televisions, Android and iOS tablets and mobile devices.
†Joint venture with Seven Network.
Source: Provider websites.
ISPs offer IPTV and on-demand video services
ISP-delivered IPTV services have had a limited take-up in Australia to date. One analyst firm estimated Fetch TV subscriber numbers to be around 125,000 in 2014.
Table 4 ISP OVC services
*Fetch TV can also be purchased from authorised retailers. Customers then subscribe directly to Fetch TV.
Source: Provider websites.
Consumer electronics companies offer content libraries
Some consumer electronics companies offer content libraries associated with their compatible devices or operating systems. Content can be accessed:
- directly through internet-accessible devices, such as tablets, smart televisions and gaming consoles
- through a television via a streaming device or set-top box; for example, Apple TV provides an IPTV service.
Streaming devices fall within two broad categories—closed devices, which restrict app development to specific platforms (such as Apple TV), or open devices (including Google Chromecast), which allow greater freedom for app developers.
These libraries can:
- House content service applications and channels. For example, the Netflix app is available through Google’s Chromecast streaming device in the US. Apple TV offers access to streaming content channels such as MLB.tv.
- Provide a range of television and film content that the consumer can access directly. For example, Australian users can access Apple iTunes store video content through a range of devices, including iPads and Apple TV, to buy and view content.
Table 5 Selected devices and associated content libraries
Source: Provider websites.
OTT service providers
The final type of provider is OTT service providers, such as Quickflix, Netflix and YouTube. These services are available on their home website and through other content aggregator services. Video content can be streamed via a broadband connection without the need for proprietary hardware or a specific ISP intermediary.
Content is generally offered on a pay-per-view or subscription basis and is available from both local and international providers.
Quickflix is a local OTT service provider, offering subscription to streamed content available over a range of platforms and devices. Paying customers reached 122,862 in June 2014—an increase of 7,221 (six per cent) since June 2012. Another local OTT service provider is EzyFlix, which offers television and film content to hire or buy on a pay-per-view basis.
International OTT services
Netflix, Hulu and Amazon all offer online content services to US residents. While these services are not marketed directly to Australians, consumers bypass geoblocking restrictions by using a Virtual Private Network or by rerouting their internet connection through an overseas-based Domain Name Server. While the ACMA has not undertaken direct research into subscriber numbers at this stage, a survey of recently published reports indicates that take-up levels of these services is already significant. According to recent reports, the US-based Netflix service alone has somewhere between 200,000 and 340,000 Australian subscribers, and as many as 680,000 Australian households may be accessing overseas-based video content services at November 2014. Netflix is due to launch an Australian service in March 2015.
Accessing OVC—key trends among Australia’s home internet users
ACMA research shows that almost eight million Australians had watched OVC in the six months to June 2014, a five per cent increase from May 2013 (Figure 6). We most commonly watched programs made available on FTA catch-up services, with just under half watching at least one catch-up program in the previous six months, 13 per cent accessing paid commercial online video services such as Fetch TV, and nine per cent viewing on-demand content on sites such as Quickflix and Apple TV. This suggests that a large percentage of online viewing is of broadcast content previously shown on live television.
Figure 6 Take-up of OVC services by Australian internet users
Figure 6 (.csv) Take-up of OVC services by Australian internet users
Base: Australians with home internet access aged 18 years and over.
Source: ACMA-commissioned consumer survey, May 2014.
Older Australians are the least likely group to access OVC services, regardless of the type of service; however, there is little difference between men and women accessing OVC (Figure 7). The majority of the audience for OVC lives in Australia’s capital cities, which reflects our urban-centric population distribution.
Figure 7 Demographics and Australian OVC access
Figure 7 (.csv) Demographics and Australian OVC access
Note: Location figures show proportion of audience by location.
Source: ACMA-commissioned consumer survey, May 2014, Australians aged 18 years and over.
What are the drivers of OVC take-up?
According to a study undertaken by Film Australia, the majority (73 per cent) of Australians using OVC do so to enable them to watch content at a time suited to them. Many (56 per cent) also like being able to skip advertising. Interestingly, cost also appears to be a major driver, with over half of all users (53 per cent) indicating that one of the reasons they watch OVC is because it’s free. This is especially true among catch-up users. A third of paying viewers said they were attracted by OVC’s affordability compared to cinema and pay TV.
Figure 8 Most popular reasons Australians use OVC services
Figure 8 (.csv) Most popular reasons Australians use OVC services
Source: Adapted from Screen Australia, Online and on demand: Trends in Australian online video use, 2014, p. 10.
ACMA research shows that the presence of children in the household, a tertiary education and a high income level are the strongest predictors of OVC access (Figure 9). As Table 6 shows, those who live with their children are more likely to access online video content (57 per cent) than those who reside in households without children (46 per cent). Consistent with these findings, the majority (58 per cent) of ABC iview’s 19 million plays per month during 2013–14 were of children’s content. A further three million plays of children’s content were accessed via other ABC websites such as ABC4Kids.
Parents also appear more willing to pay for OVC than other socioeconomic groups—with almost one in five (18 per cent) accessing paid OVC, nearly double the take-up figure of those not living with children.
Table 6 Living arrangement of those to access OVC
Source: ACMA-commissioned consumer research, May 2014
Australians earning an annual household income of more than $130,000 are most likely to access OVC, including both catch-up television and paid-for services. Those with higher incomes are also more likely to be able to afford internet services with a greater data allowance, likely increasing their capacity for greater OVC use.
University-educated Australians are significantly more likely to access OVC than those educated to other levels. For example, 62 per cent of university-educated Australians use catch-up services, compared to 34 per cent of those with a diploma or certificate from a college or TAFE.
Figure 9 Demographic drivers of OVC take-up in Australia
Figure 9 (.csv) Demographic drivers of OVC take-up in Australia
Sources: *ABC, Annual Report 2014; all other data from ACMA-commissioned consumer survey May 2014, Australians aged 18+.
What factors would encourage additional OVC take-up?
Consumer research has found the most common barriers to accessing more OVC are slow internet speed and poor technical knowledge (see Figure 10). When asked what would encourage them to use more OVC content, over half (51 per cent) of those already accessing online videos nominated a faster internet service, while 43 per cent said that having more time would instigate additional OVC use.
Motivators to using paid-for services include financial considerations. Unlike the citizens of many countries, Australians have had access to free television content since broadcasting began in the 1950s. With catch-up television content also available free-of-charge, it could be argued that Australians live in an environment where paying for in-home entertainment is more likely to be seen as an unnecessary expense. Over two-thirds of those already accessing OVC said they had no interest in accessing paid-for OVC services,  though many indicated they would be enticed to expand their use of OVC services more generally by a wider variety of content and lower price levels. Netflix’s strong performance in Australia, despite not being marketed to Australians to date, would seem to demonstrate the effectiveness of offering a product with these attributes.
Figure 10 Factors that would encourage heavier OVC use among current users
Figure 10 (.csv) Factors that would encourage heavier OVC use among current users
Source: Screen Australia, Online and on demand: Trends in Australian online video use, 2014, p. 10.
At a glance—the future of OVC in Australia
Among the recent and pending developments likely to have an impact on the OVC service environment in Australia are:
- the arrival of Netflix in March 2015, which will see the US company compete directly with local content aggregators Foxtel and Fetch TV, as well as for Australian subscribers to its own US service
- the ongoing development of FTA catch-up television services, with an expansion of available content and device compatibility
- the recent launch of Freeview Plus, which gives the consumer easier access to both scheduled FTA services and catch-up content using the HbbTV protocol
- the NBN’s continued rollout across the country, resulting in improved access to increased internet service speeds and creating greater capacity for higher definition content
- the continued expansion of 4G mobile networks and increased take-up of 4G-compatible devices, encouraging users to access longer, high-definition OVC while outside the home.
The ACMA will continue to monitor and report on developments in this area.
Background to this snapshot
Newly published data in this snapshot is taken from:
- The ACMA’s annual commissioned consumer survey, conducted in May 2014 by Newspoll on behalf of the ACMA.
- Roy Morgan Research (Roy Morgan Single Source product)—data covers changes occurring from the year ending June 2013 to the year ending June 2014. Sample sizes are provided below. Further details of the Single Source methodology can be found at www.roymorgan.com/products/single-source/single-source-fact-sheets.
Estimates in this snapshot are based on the following sample sizes:
Table 7 ACMA-commissioned consumer survey, May 2014
ACMA research program
This snapshot is part of the ACMA’s research program, researchacma, which has five broad areas of interest:
- market developments
- media content and culture
- social and economic participation
- citizen and consumer safeguards
- regulatory best practice and development.
Each snapshot covers a single issue and allows the ACMA to focus on communications, convergence and digital economy issues of interest to stakeholders. Access other snapshots on the ACMA website.
The ACMA Communications report 2013–14 is available. In addition, two complementary reports are due for release in 2015:
- Report 1—Australians’ digital life
- Report 2—The Australian VoIP industry.
These reports can be accessed from www.acma.gov.au/commsreport.
This snapshot and all the ACMA’s research publications are on the ACMA website at www.acma.gov.au/researchacma.
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 ACMA-commissioned consumer research, May 2014.
 Screen Australia, Online and on demand, 2014.
 Nielsen, Australian multi-screen report, Quarter 3 2014.
 ABC, Annual Report 2014,
 Ooyala is a video technology products and services company recently purchased by Telstra.
 Ooyala, Global Video Index Q2 2014,
 Nielsen, Australian Connected Consumer Report 2014, 2014.
 ABC, Annual Report 2014,
 PriceWaterhouseCoopers, Entertainment and Media Outlook 2014–2018, 2014.
 Business Insider, www.businessinsider.com.au, 7 February 2014.
 Quickflix, 2014 Annual Report.
 Sources: Han, M., ‘Netflix fights itself in Australia’, Australian Financial Review, 25 November 2014, http://www.afr.com/p/technology/netflix_fights_itself_in_australia_Pd9L7qZwlvAnLKho4lqa8K; CHOICE, ‘684 000 households are paying for content through international stores,’ November 2014, www.choice.com.au/media-and-news/media-releases/2014-media-releases/households%20are%20paying%20for%20content%20through%20international%20stores.aspx; CHOICE, ‘TV on the Cheap’, www.choice.com.au/media-and-news/consumer-news/news/how-many-australians-watch-netflix-241114.aspx.
 According to Roy Morgan Single Source, 65 per cent of Australia’s adult population lived in a capital city at June 2014.
 ACMA-commissioned consumer research, May 2014.
 ABC Annual report 2013–14.
 Screen Australia, Online and on demand: Trends in Australian online video use, 2014.