Ad-supported streaming boosting Australian subscriptions
Australian households are increasing the total number of streaming services they subscribe to as cheaper ad-supported options kick in, according to survey data from Kantar.
The average Australian household now subscribes to 3.4 video-on-demand services, up from 3.1 a year ago. In comparison, both UK and US subscription rates have stayed the same, at 2.7 and 5.8 services respectively.
The increase in multiple subscriptions may look small, but at around 10% represents a significant collective investment, and coincides with the introduction of ad-supported services from Amazon Prime Video, HBO Max, and Paramount+ into the Australian market.
The continuing cost-of-living crisis means these ad-supported, cheaper tiers are becoming more attractive to customers. Netflix’s ‘Standard with Ads’ plan costs $7.99 a month, compared to $18.99 a month for the ad-free Standard tier.
Netflix’s ad tier
According to Kantar, 34% of all Australian households pay for at least one ad-supported subscription, up from 16% a year prior. 25% of all new subscriptions in the June quarter were for ad-supported tiers, compared to just 10% of subscriptions in the June 2024 quarter.
A look at the UK and US figures suggests that this percentage of ad-supported subscriptions is set to increase further. In the UK, 44% of households have at least one ad-supported service, and in the US, where the ad-supported market is more mature, two-thirds of households have one.
Interestingly, while the average number of streaming services per household has remained static over the past 12 months in both these countries, the percentage of households with an ad-supported streamer has risen, showing that viewers are swapping out the premium tiers for the lower prices ones, while not increasing their overall subscription stack.
Australia’s streaming market also saw the introduction of Warner Bros Discovery’s Max service on March 31, which launched with an ad-supported tier. Overall, Max was responsible for just under 20% of all new subscriptions during the quarter, although 40% of these were Foxtel users given free access to the ad-supported plan.
Stan saw the second-highest new take up during the June quarter, no doubt attributable to the Nine-owned streaming service securing the rights to the English Premier League football. Stan made up 12% of all new subscriptions.
The pending introduction of advertising tiers for Disney+ and Stan into the Australian market, plus more interest in the quickly rebadged HBO Max, should result in the further penetration of the ad-supported video on demand market in the country.
The report is based on Kantar’s consumer data panel of 10,000 people over 16 years old. This panel is representative of the national population, with the same people being tracked over time (“longitudinal”).
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