Around 3.7 million Australians now pay for subscription video on demand (SVOD) services delivered over the Internet, according to Telyste.

The technology analysts estimate Netflix exceeded 2 million Australian subscriptions at the end of June 2017, with Stan in second with 867,000 and other services making up 769,000.

According to Telsyte’s Australian SVOD Market Study 2017, almost half (49 per cent) of Australian households currently subscribe to either Pay TV or SVOD services, with 11 per cent subscribing to both, an increase from 38 per cent in 2015.

Telsyte SOVD 2017

Telsyte predicts paid SVOD subscriptions are on track to overtake traditional Pay TV subscribers by June 2018, as consumers increasingly consume content on-demand, and across multiple devices.

The research shows that SVOD services are putting pressure on Free to Air TV rivals and traditional Pay TV, with around a third of Pay TV subscribers also having at least one SVOD subscription, and 46 per cent of SVOD subscribers claiming to “rarely” watch FTA TV.

Telsyte believes consumers will consider multiple providers, leaving room for services from Stan, Amazon, YouTube Red, Foxtel, Optus Sport, and a long list of others to encroach on Netflix’s market leadership.

The average SVOD subscriber watches nearly 26 hours of video content a week across FTA TV, Pay TV, SVOD, Online TV on demand (Catch up TV & live streaming TV), and other video content sources (incl. non-streaming videos), compared to around 21 hours for the average Australian.

“SVOD adoption in Australia has started to reach a scale which has strategic significance to media and telecoms companies alike,” said Foad Fadaghi, Telsyte managing director.

Original content, live streaming and unlimited data plans are fuelling the growth of SVOD.

On average, Telsyte results shows SVOD subscribers typically use 61 per cent more mobile data (3G/4G) than those who do not stream SVOD on smartphones. At the end of 2016, the rate of uptake of SVOD by NBN users was 25 per cent higher than non-NBN users.

“SVOD bundling provides an important loyalty driver when mobile and broadband prices are under pressure,” said Alvin Lee, Telsyte Senior analyst.

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