Question 1

Is the decline of traditional Pay-TV as terminal as the headlines suggest?

Accepted Answer

While premium revenue is contracting at a 4% CAGR to A$2.6b by FY20, the subscriber base remains stable. Household growth is expected to offset a 5-10% cord-cutting rate, keeping total premium subscribers flat at 2.5 million through the forecast period.

Question 2

How much pricing pressure are SVOD services actually exerting on the market?

Accepted Answer

Competitive pricing and tier downgrades will drive premium ARPU down at a 4.2% CAGR to A$86 by 2020. However, the threat is not universal, as 65% of consumers are currently not considering SVOD services at all.

Question 3

Can traditional broadcasters compete with the content budgets of global streaming giants?

Accepted Answer

Local broadcasters currently hold a massive capital advantage, spending A$3.5b annually on programming. This dwarfs the projected A$424m investment from SVOD operators, providing a significant moat for premium content retention.

Question 4

Where is the growth opportunity if the premium segment is shrinking?

Accepted Answer

The opportunity lies in the digital video market shift, where xVOD services are projected to grow from 7% to 31% of the total market by FY20. Incumbents must participate in these Pay-lite segments to capture migrating dollars and mitigate the 4% decline in core premium revenue.

Pay-TV Market Outlook – the growing importance of Pay-lite

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