BVOD now FTA’s ‘growth engine’, SVOD offsets subscription TV decline, finds PwC

Growth in ad spend across Broadcast Video on Demand (BVOD) went some way to offsetting the 9.8% decline of the Free-To-Air (FTA) advertising market in 2020, according to PwC’s latest Australian Entertainment and Media Outlook.

A significant contraction in marketing budgets led to a fall in ad spend across FTA, with linear TV revenue dropping 12.1% to $3.1 billion. Meanwhile, BVOD experienced a 38.8% growth in revenue, hitting $229 million

Total free-to-air TV market [click to enlarge]

BVOD grew audience and advertising revenue, as did SVOD services, adding both subscribers and users over the past year. Average total monthly hours consumed on BVOD increased 39.9% year-on-year for the period July to December 2020.

PwC Australia partner and technology, media and telecommunications consulting leader, Laurence Dell, said: “The key media consumption locations – the lounge room, the bedroom and in transit – are changing dramatically, as the era of specific devices having control over a specific location is over.

“The lounge room – once the domain of linear television and appointment viewing – now offers consumers the additional options of streaming, broadcast and premium video on demand, as well as gaming, largely thanks to the growth in connected televisions and a much simpler user interface.”

BVOD market [click to enlarge]

Meanwhile, 2020 saw Australia become one of the “most competitive” SVOD markets in the Asia Pacific region, PwC found. The “talkability” and “social currency” of many SVOD shows were key drivers in changing people’s viewing routines, during a year in which the biggest screen in the house was “no longer the exclusive domain of linear TV”.

SVOD revenues will grow at a 20.4% CAGR through to 2025, with the industry set to be worth US$81.3 billion globally and A$3.3 billion in Australia. Netflix, Amazon Prime and Stan expanded their respective offerings in the market, while Binge and BritBox launched in Australia.

Established Australian box-subscription service, Foxtel, continued to experience a decline. It lost 267,000 cable customers in 2020, but with rising customers on its sport offering Kayo (624,000 paid subscribers) and entertainment platform Binge (431,000 paid subscribers), Foxtel managed a 12% total growth in subscriber numbers.

PwC also noted the increased competition between sports streaming services, with football in particular now split across Stan Sport, Optus Sport, Ten/Paramount+ and Foxtel/Kayo, predicting that the battleground will continue beyond 2021.

SVOD market [click to enlarge]

The growth of both BVOD and SVOD came at the expense of traditional media like cinema, with box office revenue down 67.4%. This was also compounded by various lockdowns across Australia forcing people to stay home.

PwC’s report cited the “increased availability, sector breadth and catalogue depth” of the SVOD and BVOD players and platforms as a driving factor. Players like Disney+ used the pandemic as an opportunity to bring new release movies straight to consumers, skipping cinema release.

PwC Australia partner, Samantha Johnson, said: “One of the most profound impacts we’ve seen from digital disruption in recent times has been the increased use and prevalence of non-advertising supported platforms.

“The shift in weighting from advertising revenues towards consumer-generated revenues has accelerated, forcing a number of key players to rethink their business model, in a world where the expectation is that consumers can access an ad-free or personalised service, but they have to be prepared to pay for it.”


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