Andrew Northedge, consumer insights director at Kantar, says the main reason Australians are swapping between subscriptions is to cut costs. A secondary reason, he adds, has been an increasing trend to view a specific series or film. “Once they’ve watched the content, they jump to the next service.”

Loading

A report from international advertising group Dentsu last week supports Northedge’s claim, saying 50 per cent of Australians believe owning more than one streaming subscription is a “luxury” rather than a necessity.

“We know from a question we ask about impact of rising inflation on personal finances that around 60 per cent of households are either concerned or very concerned,” Northedge adds.

Kantar launched its first Entertainment on Demand study in March 2022, interviewing a longitudinal sample of 10,000 Australians quarterly, plus a boost of 1500 new subscribers each time. It says it is nationally representative of all Australian households by age, gender and region.

Despite the decline, Netflix continues to have the highest household penetration in the Australian market, followed in order by Amazon Prime Video, Disney+, Stan and Binge, according to Kantar.

Morningstar analyst Brian Han says Australians chopping and changing is not a surprise during a cost-of-living crisis, though it’s difficult to make judgments on only a few quarters of data.

“There’s definitely been a sentiment shift on streaming globally,” Han says. “It used to just be about subscribers and their growth.”

He says investors increasingly want to be shown how user bases are being monetised. “How are you monetising those? How much profit are you making from them and how much of those profits are you pissing away reinvesting in content?”

Han says Australia’s population of 26 million cannot sustain the number of streamers present in the market, pointing to inevitable consolidation in the next few years.

As a result of cost pressures, Northedge says, broadcast video-on-demand services are making gains. Broadcast video-on-demand services in Australia include 9Now, 7Plus, 10Play and ABC iView.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.