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New research shows cost-conscious Aussie consumers are opting for cheaper streaming and exclusive content

A man rides a connected TV remote on a wave of cursor arrows on a connected TV.

Illustration by Dave Cole / Getty / The Current

Streaming subscribers want more than exclusive high-quality content. They also want a good deal.

New research from Kantar suggests that recent growth in Australian streaming subscriptions is expanding appetite for free trials and new ad-supported offerings. At a lower monthly cost, ad-supported streaming provides subscribers with the same access to top-tier shows in exchange for seeing ads. Paramount+, Amazon Prime, and Foxtel-owned BINGE have dominated the Australian streaming landscape in the first quarter of 2023 — emerging as the top performers in terms of attracting the largest number of new subscribers in the region, according to Kantar.

This marked a substantial rebound for the sector, suggesting a much-anticipated return to growth after a year of decline. Despite around 1.1 million streaming services being canceled between January and March, Australian households signed up to 1.34 million new services in that period.

“Whilst the advertising-video-on-demand [AVOD] model is in its infancy in Australia, it will likely follow the path of the U.S., with two major providers — Netflix and now BINGE — offering this cheaper alternative which is gaining rapid momentum,” Kantar Strategic Insight Director Tamsin Timpson tells The Current. “I think we are about 18 months to two years behind the U.S. in terms of trends we are seeing in this region.”

She adds that it’s only a matter of time before more households adopt it and potentially more providers offer it, allowing households to stack their subscriptions more heavily (currently the average is 3.4 services per Australian household).

Australians look to 7-day free trials and exclusive content

“The offer of free trials is the biggest driver to a new service and growing number of subscribers for Australian consumers,” Timpson says.

She explains that while Australian consumers are flocking to free trials to maximize value, they’re also doing so to gain access to fan-favorite titles.

For instance, BINGE has experienced substantial growth in its subscriber base because of its impressive lineup of exclusive content, as nearly half of the platform’s new sign-ups came in Q1 2023, with subscribers attributing the allure of its exclusive content offerings as their reason to subscribe.

Nearly half (47 percent) of new BINGE subscribers in the quarter signed up for specific content — of those signing up for content, 18 percent signed up for HBO series The Last of Us. As a result, the streamer extended its relationship with HBO until 2025.

Cheaper ad-supported tier lowers the churn rate for Netflix

While HBO series The Last of Us was first on the list in the research — Netflix’s You and Wednesday were the next most enjoyed titles for the quarter. Although specific content is one of the key drivers, 34 percent of customers cited value for money as another big factor for signing up for the ad-supported plan on Netflix.

Thirteen percent of Netflix subscribers who had planned to cancel their subscriptions entirely in Q4 2022 instead downgraded their subscription to the ad-supported tier in Q1 2023.

Timpson says that rather than causing its existing customers to totally abandon the platform, the ad tier helped Netflix retain its current customer base.

“The data shows that 20 percent of new Netflix sign-ups for the last quarter were for the ad-supported tier,” she says.

Currently in Australia, Netflix takes the top spot with 6.3 million subscribers, while Amazon Prime Video boasts 4.1 million subscribers, edging out Disney+’s 3 million. BINGE, Paramount+, Foxtel’s Kayo, and Foxtel Now all fall within the range of 1.1 million to 1.3 million subscribers.