Foxtel has managed to nudge up its customer numbers since the arrival of Netflix in Australia, but the pay TV provider has seen a significant drop in market share as the US-based streaming service starts to make its presence known in the local market.
According to new figures published by Roy Morgan Research, Netflix has steadily grown since its Australian launch in March. By July 2015, Netflix's user base had reached 1.89 million Australians over the age of 14, equivalent to 8 percent of Australian homes.
The news comes after a massive shake up in the Australian TV and home streaming landscape in recent months. Foxtel got the ball rolling bylast year and , while the arrival of SVOD services and pushed streaming into the public consciousness.
Not to be forgotten in the ever-growing digital media landscape, legacy provider, saying they would help grow the industry as a whole.
While Quickflix has since seen, CEO Stephen Langsford's prediction about market growth has largely been proven true. Thanks to the arrival of Netflix and, to a lesser extent, other streaming players, more than 1 in 3 households now have some form of pay TV or subscription streaming service. Roy Morgan notes this is an increase of almost 30 percent since the start of the year.
But this growth hasn't all been good news for Foxtel. According to Roy Morgan, Foxtel had 2,291,000 subscribers in January 2015, roughly 95 percent of the total pay TV and streaming market.
Based on Roy Morgan's numbers, Foxtel had added 55,000 customers and more than 170,000 of its users had begun using Netflix by July 2015. However, the company's market share had dropped away significantly, accounting for 76 percent of the total pay TV and streaming pie.
After launching in late March, Netflix's customer base in July was roughly one third of Foxtel's.
General Manager of Media for Roy Morgan Research, Tim Martin, said the market had stayed steady before the arrival of Netflix, but there was clearly plenty of room for growth. However he noted that Foxtel's declining market share may not be that big a worry to the provider.
"In just four months, Netflix has expanded the total [pay TV and streaming] market up to over a third of all homes," said Martin. "So far, it appears Foxtel hasn't been damaged by the arrival of Netflix.
"It may turn out to be that the two are not direct competitors after all: Foxtel subscribers will view Netflix as an add-on provider, and non-subscribers were never going to get Foxtel anyway."
Netflix did not comment on the figures, with a spokesman saying the company does not break down subscriber numbers by territory.
Foxtel has contested the Roy Morgan figures, putting its total subscriber base at almost 3 million.
"Foxtel has experienced strong growth over the past year, despite the introduction of SVOD, and we now have well in excess of 2.8million subscribers," a Foxtel spokesperson said in a statement. "We've long said that SVOD is an add on service that is complementary to people's ordinary cable and FTA TV viewing and it looks like Roy Morgan's own research has born this out."
Update, August 13 at 12:05 p.m. AEST: Included comment from Foxtel.