Netflix reaches 8% of Australian homes in July

Netflix helps whole pay and subscription market grow

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published August 11, 2015 3:45 pm AEST

Subscription video on demand (SVOD) provider Netflix has reached 8% of Australian homes and 1.89 million viewers over the age of 14 in July.

The number of people subscribing to the streaming service jumped by 24% in July, down from 37% in June, but still a strong result.

According to Roy Morgan Research, almost 1 in 3 households now have some form of pay or subscription TV.

Interestingly, Tim Martin, General Manager Media, Roy Morgan Research says that the arrival of Netflix hasn't appeared to have damaged Foxtel. "It may turn out to be that the two are not direct competitors after all: Foxtel subscribers will view Netflix as an add-on provider, and non-subscribers were never going to get Foxtel anyway", he said.

What Foxtel is likely to find is that many of its subscribers are dumping platinum and other high-end entertainment and movies packages – which can cost subscribers up to $25 per month per package – for Netflix. So the number of Foxtel subscribers might only see a small change, but the average revenue per household is likely to fall dramatically – particularly when you consider a basic Foxtel package is $25 per month and the top end platinum package is $120 a month.

We'll have to wait and see the latest financial results from Foxtel's joint owners, Telstra Corporation Ltd (ASX: TLS) and News Corp (ASX: NWS) later this month, but they probably won't be pretty.

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