Netflix Rivals in Australia: Streaming Subscriber Trends "Better Than Expected"

Netflix will launch in Australia next month and offer such originals as 'Marco Polo'

Ahead of the streaming video giant's launch down under in March, existing providers say they have seen solid demand.

Australia’s new batch of streaming video services are building healthy customer bases with a market expected to reach more than 400,000 subscribers by the time Netflix launches down under next month.

Streaming service Stan, owned by the Nine TV network and publisher Fairfax Media, launched in January and is projected to have over 100,000 users signed up, with early adoption of the service better than expected, according to Fairfax CEO Greg Hywood. By the time Netflix launches, Stan will have started converting trial customers to paying customers, he argues.

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Rival service Presto, jointly owned by pay TV giant Foxtel and the Seven TV network, also launched late January. It has not yet giving subscriber numbers.

Netflix itself will have a possible 170,000 subscribers from the get-go thanks to a deal with pay TV platform Fetch TV, which will give Netflix access to the firm's installed base of second-generation set-top boxes. Fetch TV currently provides non-exclusive linear pay TV channels and a library of 4,000 films. It has deals with three of the top four ISPs in Australia, which bundle Fetch with their services. Fetch will also expand into New Zealand with Netflix.

Announcing the tie-up with Fetch TV this week, Bill Holmes, head of business development at Netflix, said: "As we surveyed the Australian market, Netflix was impressed by the Fetch TV service, unique business model and the committed coalition of telco partners. By partnering with Fetch TV, we are making it easy for TV fans and movie lovers to watch Netflix on their televisions."

Stan is using exclusive and original content to market its service, including the fact that is offering new AMC hit show and Breaking Bad spin-off Better Call Saul, which it is streaming at the same time as it hits the U.S. Stan also has such fare as Transparent among others. Stan is also providing the full series of the Nine Network’s big drama Gallipoli, which it started streaming one day after the first episode premiered on linear TV.

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Adding to its original programming plans will be two other local dramas. This week, Stan announced development funding for a Wolf Creek series from Greg Mclean and Banijay’s Screentime, based on McLean’s hugely successful horror films, and political thriller, Enemies of the State, from Rake and Saving Mr Banks creators Essential Media and Entertainment and producer Robert Connolly.

“Original productions have always been part of Stan’s programming plans. The opportunity to create world-class shows outside the constraints of the traditional TV schedule is a fantastic brief for any producer, and we look forward to working with the best local and international creatives to bring fresh and exciting stories to the screen," said Nick Forward, Stan’s director of content and product.

Stan also has licensing deals with CBS Studios, the commercial arm of the Australian Broadcasting Corp and Roadshow Films.

Netflix, which has been expanding internationally, is making its move into local content in Australia, too, announcing a deal on Thursday with Australia’s largest TV distributor, Beyond International. Netflix customers will be able to see the Beyond-produced MythBusters and such Australian kids titles as Lightning Point, the first three seasons of H2O: Just Add Water and the first season of Mako Mermaids, as well as such international kids favorites as Maya the Bee, Lalaloopsy and The Hive.

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Netflix will launch next month with its original programming such as Marco Polo, Bloodline and Grace & Frankie along with big Disney films such as Frozen and Maleficent.

Meanwhile, incumbent streaming operator Quickflix , which has a customer base of 136,000, predicts that there will eventually be consolidation of streaming services, but CEO Stephen Langsford is optimistic that there is room for a number of players. With subscription prices starting at AUS$10.00 ($7.83) per month, households can easily afford more than one service, he argued.

"The [streaming] services offer fantastic value – half the price of a movie ticket and it's good entertainment for the whole household," Lagsford said. "I could imagine customers with one, two or three services."

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