Pay-TV density

IBISWorld forecasts pay-TV density to decrease by 0.3 percentage points in 2024-25 to 15.8%. According to data from OzTAM, household pay-TV subscription numbers fell drastically over the last two quarters of 2023 and the first quarter of 2024. Traditional pay-TV subscriber numbers continue declining due to consumers' strong uptake of streaming services. The cost-of-living crisis has weighed on real household discretionary income in 2023-24 and is barely recovering in 2024-25, dissuading consumers from spending on entertainment platforms, especially pay-TV subscriptions.

Pay-TV density has declined over the past five years. In response to declining total subscriber numbers, Foxtel, which holds the largest share of the pay-TV market within Australia, slashed its prices late in 2014 to help attract and retain more subscribers. This ultimately led to cheaper subscription packages and reduced contract lengths for new customers. Household subscription numbers consequently rose till 2017-18, as cheaper prices lifted demand for pay-TV subscriptions.

The arrival of US-based subscription video-on-demand (SVOD) service Netflix in 2015 and Disney Plus in 2019, along with local competitors Stan and Presto (before its closure in February 2017), placed pressure on the traditional business model of pay-TV providers. SVOD services allow consumers to access movies, TV shows and other content on various platforms, often at a much lower price than pay-TV. The entrance of new online players has substantially weakened the demand for pay-TV subscriptions.

According to data from OzTAM, household pay-TV subscription numbers have followed a largely downward trend since March 2019. Consumers have increasingly switched to internet-based streaming services, contributing to falling household pay-TV subscriptions over the period. Household numbers have grown strongly as subscription numbers continue to fall, driving pay-TV density down. As a result, IBISWorld forecasts pay-TV density to fall at an average annual rate of 2.06 percentage points over the five years through 2024-25.