Forget socialising at the pub or throwing balls to the dog, the one “vital” thing Australians cannot live without is screen time entertainment, with budget-friendly, ad-supported streaming services proving to be a godsend.

A study by emerging technology analyst firm  Telsyte found about 2.5 million video on demand (SVOD) subscriptions were subsidised by advertisements (year on year) to the end of June, up from one million a year ago.

With 25.3 million subscription services in play, the ad-supported tier now accounts for 11 per cent of total SVOD services.

Netflix and Paramount+ ($7.99), and Binge ($10), offer the most affordable base-tier monthly ad-supported plans, and come at a time when consumers continue to keep an eye on the household budget.

Overall, the study found that Netflix [which was not consulted by Telsyte] was the most popular streamer with 6.2 million subscriptions.

Prime Video was close behind with 4.8 million subscriptions (up seven per cent), and also offered a $9.99-a-month deal with ads.

The surprise winner in subscriber growth was Paramount+, up 18 per cent since last year.

Telsyte says subscriber growth is due to a population increase and the introduction of the more affordable ad-supported plans.

There was also indications of strong consumer interest in diverse content across multiple services, with 70 per cent of subscribers paying for more than one service.

RMIT’s expert on internet-distributed television in the School of Media and Communication, research fellow Dr Alexa Scarlata, tells The New Daily the top streamers are now considered “important cultural touchstones” for us.

“Australian audiences have adapted to a crowded streaming market … no doubt propelled by the widespread take-up of smart TVs and the impact of Covid-19 lockdowns.

“Original content from services like Netflix, Prime Video and Apple TV+ are now important cultural touchstones [and] with content fragmented across services, audiences need multiple subscriptions to stay in the loop”.

It’s no blockbuster, but definitely a weekend filler. Globally, The Union clocked up 16 million views in just one week. Photo: Netflix

Why do people choose Netflix?

A quick look at what Australians were watching on Netflix for the last week of August shows their programming and acquisition is paying off.

The feature films included The Union, starring Mark Wahlberg and Halle Berry, Operation Fortune: Ruse de Guerre, The Other Woman, Why Him?, The Lie: The Murder of Grace Millane and older releases Where the Crawdads Sing.

A shareholder letter dated July 19 sheds some light on the California-based streaming giant, which arrived in Australia in March 2015.

“Viewing is key to Netflix’s success. It’s the best proxy we have for member happiness, and when people watch more, they stick around longer (retention).

“[They] talk about Netflix more often (which drives acquisition) and place a higher value on our service.”

Scarlata says after a decade, Netflix “remains our firm favourite”.

“At first, this was likely because Netflix arrived fully formed, with an established reputation for original content and a very user-friendly interface.

“At one stage, in 2020, research from Ampere Analysis suggested that Australia was the most highly penetrated Netflix market in the world.

“Netflix has established itself as the gold standard for what users expect from a streaming service.”

She revealed that in a recent RMIT study, the majority of smart TV users interviewed nominated Netflix “as their most-valued service”, describing it as easy to use and reliable, with lots of new content.

Is ‘streaming at a crossroads’?

Despite increases across the board in subscriptions, a Deloitte report in March revealed that 36 per cent of people surveyed said the content on SVOD wasn’t worth the money, with 40 per cent cancelling a streamer in the previous six months.

“Subscription video-on-demand services were really reasonably priced when they first arrived in Australia, but their cost has increased a lot in recent years,” Scarlata said.

She said crackdowns on password sharing and the choice of services makes it expensive to literally “see it all”.

“So, Australians are churning through subscriptions more than ever.”

RMIT research found audiences will often cycle through services to “watch everything on Netflix” for a few months, before moving on to “work through Stan”.

Australians are also increasingly supplementing paid services with free services and opting to pay with their time, by using less expensive ad-supported SVOD tiers.

As for Paramount+’s 18 per cent rise in subscriptions?

Scarlata notes that it comes from a low base so cannot be framed as a threat to the major players.

“I would attribute the increase to Paramount+’s focus on Australian series such as NCIS Sydney and Fake and the fact that they use Network 10 and 10Play as a flywheel to Paramount+ every chance they get.”

She said a Paramount+ subscription campaign (ad-supported tier) of just $4.99 a month for a three-month trial (currently still only $6.99 for a new account) may have also been a motivating factor.