The Australian entertainment subscription market, including video, music, and game services, grew 5% to 52.3 million in the 12 months to June 2024, with the popularity of the ad-supported plans driving growth in Subscription Video on Demand (SVOD).

SVOD services saw a 4% year-on-year increase, reaching 25.3 million in June 2024, and more than 70% of SVOD subscribers now have more than one service.

Ad-supported subscriptions now account for 11% of the total SVOD services. Excluding dedicated sports services that serve ads during live sports broadcasts, Telsyte's research found there are some 2.5 million SVOD subscriptions subsidised by advertisements (June 2024), up from around million a year ago.

This growth is likely to continue with Telsyte's research finding consumers are increasingly receptive towards advertising on their SVOD services if it can help subsidise the subscription cost. Close to 1 in 2 (45%) of SVOD users are interested in such a plan, up 9 per cent from a year ago. Telsyte estimates the introduction of more ad-supported plans could potentially lift the average number of subscriptions per household closer to 3.7 (currently 3.5) by 2028, with total SVOD subscribers forecast to top 30 million in the same period.

"While Ad-subsidised SVOD subscriptions have been driving market growth, SVOD providers are entering the end of the peak growth cycle", said Telsyte Managing Director Foad Fadaghi.

Share wise, Netflix remains the leader in SVOD with 6.2 million subscriptions at the end of June 2024 (up 2 per cent), followed by Amazon Prime Video with 4.8 million (up 7 per cent); Disney+ with 3.1 million (up 2 per cent); Stan with 2.6 million; Paramount+ with 1.8 million (up 18 per cent); Kayo Sports with 1.6 million (up 14%) and Binge with 1.6 million up 1%). Among all services above 100,000 subscriptions, Britbox saw the fastest growth in FY2024.

In FY2024, SVOD market revenue (including advertisements) reached an estimated $3.5Bn, a 15% year-on-year increase. However, cost-of-living pressures saw the average monthly budget of SVOD users declining 2% to just under $36, slightly offsetting the previous year's 7% increase. The hardest-hit consumer segments that saw their SVOD budgets reduced the most were young families and individuals with a medium income.

Despite this, 53% of SVOD subscribers Telsyte surveyed indicated they continue to discover interesting new content and 45 per cent were comfortable paying for multiple services.

Across the board, single digit growth suggested the streaming market is reaching maturing, with streaming music up 9% to 18 million subscriptions and games-related subscriptions up 6% to more than 9 million, alongside SVOD's 4% growth. The higher growth in streaming music was boosted by the launch of TikTok Music.

Elsewhere, Telsyte estimates the number of xR headsets adopted by Australians is expected to more than double from around 1.5 million in 2023 to almost 3 million by 2028.

According to Telsyte's research, the average total weekly video entertainment consumption increased by 4 per cent year-on-year to 47 hours, driven by free sources such as BVOD, YouTube and videos on social media.

Social media video platforms such as YouTube and Tiktok continued to be popular among Australians, with more than a million estimated to be subscribed to YouTube Premium, the paid version of YouTube.

Broadcasting Video On Demand services, including 7Plus, 9Now, 10Play, ABC iView and SBS On Demand, remained popular and most BVOD platforms had more than 11 million viewers during FY2024. The research also highlighted the increased usage of 9Now during the 2024 Paris Olympics.

Meanwhile, the Free and Ad-supported streaming TV (FAST) market is quickly expanding, with nearly five million Australians claiming they had used FAST services or services that offer FAST channels in the last 12 months.