In just a decade global streaming platform Netflix has played a key role in reshaping the way Australians consume entertainment media.
A report by Streaming Industries and Genres Network, a group of industry experts and academics, gives insight into the impact Netflix has had on the television, streaming, and advertising landscapes.
Australia got its first taste of streaming in 2008 with ABC’s iview platform, followed by QuickFlix and SBS On Demand in 2011, followed by Foxtel Now and 10Play in 2013.
But it was the arrival of SVOD platforms such as Netflix and Stan in 2015 that saw the streaming revolution truly begin.
According to Roy Morgan Research, SVOD numbers overtook pay-TV provider Foxtel within eighteen months of Netflix's launch in Australia, a sign of things to come.
Since then Netflix has only increased its market share while rival SVOD platforms either fell off completely, or were left to compete for the remaining market share.
And in that time, Netflix has always maintained its leading position.
In 2020, Ampere Analysis reported Australia was the world’s most Netflix-penetrated market, with the service available in 63% of Australian homes, compared to 50% in the US. Today, 67% of Australian homes use Netflix.
Despite the SVOD market being fragmented, Australians still spent $3.5 billion on streaming subscriptions in 2023-24, with 42% of adults using over five online video services as of 2024.
Meanwhile, television broadcasters experienced a sharp decline in both audience numbers (46%) and ad revenue.
In contrast, Netflix found success introducing advertising to its platform with an ad supported tier, currently $7.99 per month.
The platform had doubled its ad revenue year-over-year in 2024, while the company also reported a 16% increase in revenue to $10.247 billion for the December quarter.
“We expect to double it again this year so that should give you a sense of the slope of monetisation growth that we’re on. And broadly, we think of this as making solid progress,” said Greg Peters, co-CEO of Netflix.
In the December quarter, Netflix ad plans represented over 55% of sign-ups across countries where advertising supported subscriptions are available.
“We've seen membership on those ads plan increase about 30% quarter-over-quarter this last quarter. That was on top of 35% the quarter before, on top of significant growth the quarters before that,” Peters added.
As a result, Netflix continues to increase its investment in advertising.
“It means that we obviously have more people that can sign up,” Peters said.
“It’s also the reason we’ve been successful in driving that first ads priority we had in our ads goals, our most primary ads goals, which were to get to sufficient scale.”
Alex Spurzem, managing director for Samsung Ads Southeast Asia and Oceania (SEAO), said SVOD platforms had recognised the value in advertising supported tiers and were seeing the benefits firsthand.
“Not only have they adopted the traditional ad break for those who want to pay less, but the strategy actually holds the key to profitability,” he said.
“Netflix says it now has over 300 million ad-with-fee subscribers globally, and in December, just over half of all new sign-ups were for ad-supported subscriptions.”
Peters said based on the success of advertising supported tiers that Netflix will continue to make it a priority moving forward.
"But we're making solid progress already. For example, we exceeded our ads revenue target in Q4, which was an exciting milestone to get," he said.
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