How Netflix Is Doing In Australia: 2 Stats That Should Scare Foxtel and Quickflix

netflix in australia

Netflix is rumoured to enter Australia early next year (that was later confirmed), but that doesn’t stop a few enterprising Australians from accessing it now. Actually, it’s more than a few.

The article we linked to said up to 200,000 Australians signed up with the service. There are also many anecdotes about the popularity of Netflix in Australia in the forums and social media. So we decided to look deeper into the subject*.

Let’s start with the basics: stat 1 – market share.

Our study found Netflix to be the second most popular paid-content media company in Australia, despite the fact that they are not officially available here and that they are actively geo-blocking Australians. Here’s a breakdown of the market (click on the image to get a bigger picture):

video streaming market share

That’s right. Netflix owns 27% of the Australians currently using media subscription or rental services. And as you can see, they’ve tripled in size from just 9.88% in January 2013.

But the growth didn’t come at the expense of the local dominant player: Foxtel. The growth came from the old-world end of the market: rentals and to a lesser extent, local clone – Quickflix.

I should note here that the graph is based on the number of users (popularity) as opposed to dollars spent (revenue). And that means it doesn’t take into account metrics such as:

  1. The number of transactions per customer. For example, if a person frequents Blockbuster twice a month for a year – we’ll count them only once.
  2. How long Netflix, Foxtel and Quickflix customers are subscribed for. See below for explanation.
  3. The fees they charge. Netflix might be growing in popularity in Australia but they charge around $10 a month. Foxtel, on the other hand, can charge more than $100.

So it’s true that Netflix is growing in popularity in Australia, but only among people who perhaps can’t afford (or simply refuse) to pay Foxtel’s fees. For those who are comfortable with paying those fees? They are happy to keep paying for the convenience Foxtel offers (in that they don’t have to go through a VPN service to combat Netflix’s current geo-blocking of our great country).

Another interesting thing to point out are the tiny grey bars at the top. That’s a lesser known alternative to Netflix: Amazon Prime. From what we can tell, it only started to gather momentum in Australia from September 2013, but as you can see, it has also grown – again, despite actively blocking Australians.

And although by number of users Amazon Prime is small in Australia, they charge an annual fee as opposed to a monthly fee. So by dollar amount, it’s actually quite significant. Again, the annual charge is a fraction of Foxtel – around $100 for the year.

How long did the subscribers stay?

The next stat of importance is how long subscribers stay with a particular service? This is a good indicator of how satisfied they are with the particular service.

But there’s a catch with calculating average subscription length.

If Service ABC has been around for 10 years and Service XYZ has been around for 1 year. Let’s say users of ABC stayed for an average of half the time and users of XYZ stayed for the whole time. ABC in this case would still appear to be doing better than XYZ because ABC would have an average subscription length of 5 years. Where XYZ would only be 1 year.

To do the right comparison, we need to do what is called a cohort analysis. That is, of users who start a service (sign up) in a particular month, how long did they stay for?

In the example above, we would look at only people who subscribed to ABC and XYZ with the same time period – to compare the two “cohort”. So what we might see is that ABC only has an average subscription length of 6 months and XYZ, 1 year.

So we did that analysis for Foxtel, Netflix and Quickflix. Here’s the data (our last date in the sample is 31 June 2014):

Screen Shot 2014-07-10 at 2.06.05 pm

As you can see, Netflix users stay around the longest and Quickflix the shortest. Australians who signed up to Netflix in January 2014 stayed, on average, for 110 days (roughly 3 months, 20 days). Those who signed up to Foxtel during the same period stayed for slightly less than 80 days (2 months 20 days).

Another point is that given the effort it takes to set up Netflix in Australia, namely the research and setting up of a VPN service, there is more incentive to keep subscribing given the sunk cost.

Quickflix appears way down the list as unlike Foxtel and Netflix, they also offer once-off purchases of premium programmes. And it appears a lot of people bought these once, and never went back.

Market Share vs Growth

This is such an important note, I have to point it out to avoid any confusion. It is absolutely possible for a company to grow, yet have a shrinking market share.

That happens when the overall market is growing. The company is enjoying that growth, but at a slower pace than its competitors. So the fact that you’re seeing Quickflix’s market share decrease in this dataset doesn’t mean the company is in trouble. In fact, it might be subscribing more users than ever.

And the fact that Foxtel has a steady market share doesn’t mean they are not growing in profitability. In fact, what this graphs shows is that the company has consistently grabbed 50% of overall market.

It just so happens that Netflix is getting more of the growing pie than they do, remarkably without any Australian marketing or formal Australian servicing channel.

It will be interesting to see how this develops. Who do you think will come to dominate the industry?

On Our Sample

Edit: Since there are some people who asks us about our sample, I’m adding this section to the post.

This study didn’t include iTunes, Google Play, Spotify, Pandora and Xbox purchases. Our sample size is 21,000+ Australian consumers only.

Is a 21,000-subjects sample big enough? By way of comparison, Nielsen Television Audience Measurement – the definitive measure for Australian TV ratings success in the industry has about 5,000 Australian households, and OzTam, jointly subscribed to by Seven, Nine and Ten, has 4,913 homes on their panel.

Note that Foxtel has a lot of business subscribers – company kitchens, meeting rooms and bars – they would be excluded from the sample.


  1. Brendan   •  

    What should worry the competition even more is most people use NetFlix using a proportion of their monthly internet quota. Its use would not be free or un-metered traffic. I think it’s quite clear that, providing NetFlix’s prices do not change, when available to the Australian public it could be a real problem for the other providers. I wonder how the government feels about all that lost GST, or how NetFlix will feel once they have to start charging GST….

    • thyco   •  

      GST is a non issue as its currently only 10% added on the service so instead of paying 10USD a Month we will be Charged 11USD, its still far far far far far cheaper than the rest of the competition. Despite what Gerry Harvey and other dinosaurs want to tell you, GST does not cause a 10USD item to suddenly cost 100USD

  2. ctrlaltwalsh   •  

    Interesting read, I’ve been a subscriber of Netflix for over 2 years now and I recommend it to everyone, this is all the power of word-of-mouth – If they launch in Australia and offer similar prices they will dominate.

  3. LewisK   •  

    Hi Andrianes.

    Why should we take this survey as gospel?. I’d be very interested to know more specific details on how you conducted the survey other than the 21,000+ Australians sample size.

  4. Skeptical   •  

    Andrianes–for someone who doesn’t like crunching numbers you have crunched some here and created some charts and made some assertions but those of us with a critical eye you might elaborate on what size sample set you working from and where your “data” come from. How could you possibly know how many people use Netflix via VPNs in Australia??

  5. Andrianes Pinantoan   •  

    @Lewis and @Skeptical –

    This study is not based on a qualitative survey. The data is actual and historical. Pocketbook is used by over 80,000 Australians to manage their spending habits, and so we’re able to use real spending data in an anonymised and aggregated way to look at important spending trends. The sample was culled to 21,000 so that it can be used as a representative predictor of Australian spending.

    Feel free to email me at [email protected] should you have further questions.

    I hate crunching numbers and accounting, but I love data analyses (two very different things). But you’re right, my profile is confusing – I’ve changed it to better reflect this. 🙂

  6. Skeptical   •  

    Hi Andrianes
    Thanks for clarifying and you have me interested. A couple more questions please — of the 21k how many were using Netflix as at a particular date? Also can you please shed any light on what basis did your culling from 80k to 21k…interested to know on what basis the 21k was a more representative predictor pls.

    Very interesting indeed.


  7. Andrianes Pinantoan   •  

    @Skeptical – Our user base has grown significantly in the past year, but the accounts in this sample are selected from only the ones which we have stable historical data on.

    And because ww only have spending data, I can’t tell you how many were actually using Netflix. All we can tell is that they are subscribed to it.

    • Jason   •  

      I think while the sample set is large, I don’t think pocketbook users are a good/random sample of the Australian population. Oztam and Nielsens select their 5000 households randomly from the entire population. Without random selection, statistical analysis is prone to giving biased responses

      In this case, I’d say those with the desire and know-how to bypass restrictions Netflix have on Australians accessing the service are also those who do their monthly budgetting within an app. And thats a significant bias.

      • Andrianes Pinantoan   •  

        Hi Jason, thanks for the comment. This is something that we’ve looked into.

        As far as we can tell, our sample is quite representative of the larger population (other than perhaps the very rich, the very old and the very young – under 18s).

        For example, we checked income distribution. Cross check our data with well-known market share, like Coles Vs Woolies. We use Facebook’s custom audience and saw our app users demographic align quite well with Facebook’s general population.

        In fact, Swinburne Institute researchers did a study on VPNs and found our estimate to be CONSERVATIVE:

        I think a lot of people are more tech-savvy than most assume (I think it’s a form of “illusory superiority”). It’s not just techies who downloads app these days.

        • Jason   •  

          Thanks for the response, I’m really surprised that your other sources support the data sets validity.

  8. Mark   •  

    What is Pocketbook doing looking into and sharing peoples financial spending habits? I certainly would not be trusting your company with my any of my data.

    • Bosco Tan   •     Author

      Hi Mark,

      Pocketbook is all about helping users spending smarter. Part of smarter spending is figuring out and telling our users and the public how to cut down without sacrificing lifestyle. So it’s absolutely critical we identify spending anomalies which may be counter-intuitive and macro trends. For instance, here we educate PayTV subscribers they can potentially save 10 fold, if not now, then very soon. In the IKEA post, we educate the public on how you can save significant money by looking beyond the IKEA store in your city – because IKEA is where Australians spend the most money on furniture.

      We treat data privacy with the utmost respect. Nothing we use for analysis is identifiable, and analysis is done via aggregating the data. We also do it in house and not with third party organisations to preserve this level of security, unlike many banks and utility companies.

      Finally, we do not sell any data to anyone.

    • Matt   •  

      Do you have an account with Facebook, Youtube, Yahoo, Xbox Live, Apple, Ebay???

      Pretty much any company that can collect user data will perform data mining and analysis on it and in most cases sell it to the highest bidder for them to market their product more efficiently. Pocketbook is not releasing individual data to the public. You give them permission to use your data in their analysis when you sign up (you also do the same with the companies listed above).

      I find it hard to believe that people are not comfortable with this practice but continue to have Facebook and Google track almost everything they do online and sell the data. I’m not saying that everyone will allow it, but I think that most people aren’t aware that other services have already and continued to do this for many years.

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