Variety partnered with U.K.-based consultancy Ampere Analysis to delve into the top local and regional ad-supported and pay TV services that are competing with behemoths like Netflix and Amazon. For more, click here.
Even before Netflix officially launched in Australia in March 2015, several million households were believed to be using VPNs and browsers to overcome geo-blocking for North American Netflix — and using U.S. credit cards to pay for it.
Local company Quickflix, which had a similar trajectory to Netflix, moving from DVDs to streaming in 2011, briefly looked promising. Another, Presto, began in 2014 and burned brightly at the start. But both had fizzled out by 2017, unable to compete with the legal Australian version of Netflix and Amazon Prime Video, which debuted in December 2016.
But Stan, a streamer that bowed in 2014 as a joint venture between newspaper group Fairfax Media and free-to-air broadcaster Nine Entertainment, is a local success story. It is certainly one of the crown jewels in the now merged Fairfax and Nine consortium, claiming 1.8 million monthly subscribers — a significant foothold, even if not at the level of its foreign competitors.
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While Netflix’s number of Australian subscribers is not known precisely, conservative estimates suggest close to 6 million. In 2017, public broadcaster ABC said Netflix had hit 5.5 million subscriptions by the previous May, just 15 months after launch. Roy Morgan Research says Netflix now has 11 million users among a population of 26 million.
That kind of penetration has hurt the linear incumbents. Australia’s conventional TV networks and the ABC have plunged into the red. Pay TV market leader Foxtel holds its own, largely due to its lock on live sports — Australian rules football, rugby league and cricket, in particular.
Stan is making its mark with a mix that seems fairly traditional. According to Ampere data, 75% of Stan’s library is composed of TV, the rest film. The genre mix is dominated by crime/thriller (19%), comedy (18%), sci-fi (14%) and children’s/family (14%).
“What’s really hard to compete against is Netflix’s stock of original movies and TV shows,” says Guy Bisson of Ampere Analysis. Netflix and Amazon both have access to content libraries roughly three times that of Stan. A premium subscription to Stan costs slightly less than Netflix: AU$17 ($12.11) for the local service versus AU$19.99 for Netflix.
It may be surprising that local content among streamers in Australia has not been the key it has in other territories, but the anomaly is likely a reflection of the nation as an English-language market, with an audience largely comfortable and up to date on American entertainment.
And Stan’s percentage of local programming, while small (at 7%, according to Ampere data), is still ahead of that of both Amazon Prime (4%) and Netflix (2%). Netflix local production activity Down Under is unusually small: For instance, it has been engaged in just 15 Australian originals, compared with 66 in Japan and 58 in Canada.
Stan says its five local productions commissioned in the 2020 fiscal year have total budgets of AU$65 million. Titles include dramas “The Commons” and “The Gloaming”; six-part thriller “The Tourist,” co-produced with the BBC; and original films “I Am Woman,” (a Helen Reddy biopic) and Melbourne-set haunted house movie “Relic,” which bowed at Sundance.
Going forward, as the streamer matures as a development and commissioning organization, it has 26 productions in development or production, and joint development funds with regional film agencies Film Victoria and Screen Queensland.
Yet Stan finds itself lining up alongside Netflix and Amazon in a current federal government probe into media and entertainment that’s examining everything from local production to taxation. All three companies are arguing for voluntary spending targets and a light regulatory touch.
Stan warns that setting minimum levels of spending on Australian content would be less detrimental to its foreign competitors. Quota minimums would be “counterproductive, plagued by unintended consequences, and damaging to business models across the sector,” it said in a government submission. Stan believes that if all streaming services are obliged to direct specific revenue percentages into local content, vertically integrated rivals like Netflix and Disney Plus would be able to overpower and outspend it.
Ultimately, success for Stan is a matter of getting the levels right: recent and decent content, and more local than its streaming competitors — but not so pricey that it breaks the bank.