The rising number of internet connections has limited industry growth, as more viewers have shifted to watching programs online
Melbourne, Australia (PRWEB) July 09, 2014
Pay Television in Australia has performed strongly over the past five years due to increasing pay-TV penetration and greater subscription numbers. Industry revenue is estimated to increase at a compound annual rate of 4.3% over the five years through 2014-15. Financial performance has been assisted by reduced demand for free-to-air TV services and greater real household discretionary income over this period. According to IBISWorld industry analyst Spencer Little, “Viewers have watched free-to-air TV networks less, demanding pay-TV subscriptions to receive a greater range of TV programs.” Revenue is estimated to grow by 1.0% in 2014-15, to reach $5.1 billion.
Foxtel has increased its dominance in the industry significantly over the past five years, increasing its revenue and market share concentration through organic growth and the strategic acquisition of Austar. However, “The rising number of internet connections has limited industry growth, as more viewers have shifted to watching programs online,” says Little. As a result, the total minutes of TV watched by consumers has fallen, and viewers have been using online streaming and downloading websites to watch popular films and TV shows. The industry is expected to continue growing over the next five years, though at a slower rate. Demand for free-to-air TV services is projected to remain stagnant and real household discretionary income is expected to grow, benefiting industry operators. However, pay-TV density is projected to fall. Consolidation is expected over the next five years, as Foxtel increases its dominance as the industry's largest player. Long-term industry performance is expected to be threatened by the rising prevalence and accessibility of online platforms that allow consumers to view content via streaming and downloading websites.
The Pay Television industry has a high level of market share concentration. The major players in the industry are Foxtel Group and Telstra Corporation Limited. Foxtel, through its joint programming and wholesaling deals with Optus and Austar, has access to an overwhelming majority of subscribers. Due to these wholesale subscriber arrangements between Foxtel and Optus, there is effectively one dominant player in the industry. There are also a few very small niche firms that primarily broadcast foreign-language programs. In 2012-13, 96.5% of industry establishments employed less than 200 staff and only 20 pay-TV networks generated more than $2.0 million in revenue. These trends are indicative of the small niche broadcasters that operate in the industry. Market share concentration has increased over the past five years due to Foxtel's organic growth and the strategic acquisition of Austar.
For more information, visit IBISWorld’s Pay Television report in Australia industry page.
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IBISWorld industry Report Key Topics
The industry consists of companies that primarily broadcast TV programs on a subscription or fee basis. These services are generally delivered via cables or satellites. Online subscription TV services are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.