Netflix on the fast track in Oz

Flagship Netflix original series House of Cards

Netflix’s Australian service already has an estimated 1.6 million users in the country, dwarfing its local streaming rivals, according to a new report.

Citi Research analyst Justin Diddams estimates Netflix – which launched down under in March – has 900,000 paying customers and a further 700,000 who are still on free trials.

In a briefing for clients entitled SVOD… Reality bites in 2015, Diddams calculated the Nine Entertainment/Fairfax Media joint venture Stan has 322,000 sign-ups and 153,000 paying customers.

Foxtel’s Presto Movies and Presto TV, co-owned by Foxtel and Seven West Media, have 193,000 and 80,000 respectively, he said. Foxtel has 2.7 million subscribers and OTT service Fetch TV has 280,000.

By 2018, Diddams projects subscription VoD households will grow to three million while Foxtel will remain the dominant provider of premium sports and drama content, reaching 35% penetration (up from 30% currently).

He expects Fetch TV’s combined offer of linear channels, transactional VoD and apps for Netflix and the free-to-air (FTA) broadcasters will see it hit one million subs by 2018.

“For FTA broadcasters, increasing penetration of SVoD could place further downward pressure on audiences but this doesn’t mean FTA is dying, but likely to limit earnings growth as focus on differentiated content is needed,” Diddams wrote.

A Citi survey found Foxtel households are the biggest consumers of streamed content, with Netflix, Stan and Presto over-indexed across these homes.