Seven sales boss: Australian market only big enough for two streaming players
Burnette
The sales boss of Seven West Media believes the Australian streaming video on demand (SVOD) market is only big enough to sustain two services, describing it as a “dynamic game of attrition”.
Chief revenue officer Kurt Burnette told Mumbrella he believes the streaming market, which currently includes Foxtel and Seven West Media’s joint venture Presto, Fairfax Media and Nine’s Entertainment Co’s Stan, struggling Quickflix, and the forthcoming entrance of US giant Netflix, would eventually be whittled down to just “two serious players”.
But he would not be drawn on who would be left standing, but said he was confident in the partnership between Seven and Foxtel over Presto which launched officially a fortnight ago and is due to undergo an overhaul in the coming months.
The chief revenue officer said: “There are going to be some exciting developments over the next few months about the iteration of Presto – the look, the feel, the content of the product – it is going to be a very dynamic game of attrition.”
Burnette said he believed that SVOD would eventually be a significant revenue stream for the TV network, but added they were being cautious not to cannibalise their existing free-to-air audiences. “Eventually (SVOD) will be a strong revenue stream,” he said. “The partnership we have put together with Foxtel is a very smart and strong business plan for the future.
“We are very confident it will do what we hoped over time. It will take time. Viewing habits are changing but they are probably not changing as fast as people might think.
“Cannibalisation is obviously something we consider, but free-to-air in Australia is in a really strong place. Some people are going to choose to want to subscribe to movies, to TV series regardless of what we do so our aim is to be in it.”
Burnette said that while the market for SVOD would grow in the coming years there would still be a place for key TV franchises and live sporting events such as the Australian Open, which drew 1.783m to Channel Seven last night for the Kyrgios vs Murray quarter final.
“At the end of the day there will still only be one place to come to watch My Kitchen Rules, there will be still only be one place to see Djokovic or a Kyrgios match, and those content moments will continue to spike and deliver Australians at scale,” he said.
“But there is also a significant place for bingeing and snacking (on content) and so what that will end up looking like is hard to say.
“We have clear plans for both of them. They will both have successful places in the Australian media.”
Rivals Stan and Netflix both declined to comment on Burnette’s remarks, but the declaration comes on the same day that Stan announced an exclusive deal with Village Roadshow for the SVOD rights to the distributor’s latest films in 2015.
Titles include some of 2014’s biggest films such as: The Lego Movie and The Hunger Games: Mockingjay Part 1 and The Wolf of Wall Street.
“As Australia’s largest independent film distributor, Roadshow has a history of bringing incredible films to Australian audiences. We’re proud to add so many of these celebrated and much loved movies to Stan’s lineup,” said Mike Sneesby, CEO of Stan.
Nic Christensen
Disclaimer: The Seven Network is currently advertising on Mumbrella.
His comments are absolutely correct… to bad Presto will be first on the chopping block, followed by old mate Stan.
Remember Galaxy TV & Optus Cable? Thought so.
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I checked out Presto last night and their content looks pretty good actually. Now I’m not one to deliberately hand sir Rupert my money, but I don’t think everyone in Australia has such high standing morals such as myself.
Me thinks Stan will be the one to fall off the perch. Quckflix too, but isn’t that already dead?
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Netflix will destroy all.
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Foxtel and 7 will lose out.
Seven West has a history of failures outside of traditional broadcast
– i7
– C7 Sport
– Unwired
– Yahoo7 (has never reached the heights ninemsn did)
Presto aside, Foxtel has issues with its main prize, its Pay TV business. This will hamper Presto’s competitiveness as its there to protect the Foxtel base. Foxtel issues won’t stem from content but technology. IQ3 was first announced in 2012.. Bandwidth and capacity issues on cable and satellite mean it cant broadcast more HD without a significant network upgrade. It certainly can’t do 4K (iQ3 is provided by Pace and it hasn’t got a 4K solution) when internet competitors like Netflix can. Sony and Google. Netflix and UHD. Manufacturers are falling over themselves when it comes to showcasing IPTV. Technology has driven much of these audience shifts. Foxtel hasnt kept up. Presto cannot outshine Foxtel and therefore it will fail.
Not exactly a winning match.
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You can hate on Foxtel all you want but before you predict Presto’s demise you might want to ask how long News and Telstra + Seven West can afford to support it as a loss making venture while they go after market-share. The answer is a very, very long time and there’s an even longer list of buyers or partners waiting for when they decide to pull out.
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#4 History Repeats I think Presto will fail but not because of technology; more to do with the fact Foxtel will never give Presto what it needs to be successful when compared to its competitors.
Time and time again the incumbent refuses to innovate due to the rivers of gold in the existing business model only to have someone else come in and completely change the landscape.
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I think Stan is in with a chance, was really surprised by the content available on there wherelse Presto didn’t really interest me. That said, we all know Netflix is here to stay,
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Agree there’s only room for 2 major subscription streaming players: Netflix and Amazon Prime.
The sooner Australian broadcasters realise that the internet doesn’t have boarders the sooner they’ll start producing content that people want to actually pay for to watch.
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If the music streaming market can only sustain one meaningful player – Spotify vs a bunch of other also rans, I’d say SVOD may well end up the same.
Not sure anybody ever wins a war of attrition.
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