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The Australian streaming market in 2015 - the battle lines are drawn

With new local video services preparing to battle streaming giant Netflix, it finally looks safe to declare 2015 Australia's Year of Subscription Video.
By · 19 Dec 2014
By ·
19 Dec 2014
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The drought is breaking and this year Australians will be spoiled for choice when it comes to subscription video services which don't require masquerading as an American. The change coincides with a piracy crackdown, but the Australian government's empty threats against The Pirate Bay won't do as much to tackle illegal downloads as the spread of legit all-you-can-eat video services.

After years of speculation Netflix is finally coming to Australia in March. It's not the internet's Garden of Eden – you won't find everything you've ever wanted to watch – but it's a step in the right direction. Netflix's imminent arrival has opened the floodgates, with Foxtel and the free-to-air networks finally offering Australians a better deal, although there will likely be casualties along the way.

Netflix arrives in March, although Stan (backed by Nine and Fairfax) should beat it to the punch if it wants to offer Breaking Bad spin-off Better Call Saul when it begins screening in February. Meanwhile Seven and Foxtel are planning a major marketing push for Presto Entertainment during the Australian Open, hinting at a February launch to steal some of Stan's thunder. 

By Easter, Aussies should have access to all three new services – each offering all-you-can-eat video libraries for around $10 to $15 per month. They'll join existing local players Quickflix and Presto Movies. If the market didn't look crowded enough, we're still waiting on Network Ten to put its cards on the table regarding a subscription service.

Easter falls on the first Sunday of April which, as luck would have it, is only a few days before the deadline the Australian government has set Internet Service Providers (ISPs) to block BitTorrent sites such as The Pirate Bay. Coincidence? Perhaps not.

Easter weekend should also see the season return of Game of Thrones – the world's most pirated TV show. Whether or not this is a coincidence, it will be the first major test of the government's efforts to block piracy. Of course piracy numbers are rubbery at the best of times and it's likely that the both the government and the pirates will declare victory.

Driving piracy will be the fact that Foxtel is expected to retain exclusive access to Game of Thrones in 2015, not letting competitors like Quickflix, Google Play and Apple's iTunes offer even the first episode for sale until Foxtel has finished screening the entire season. It won't be in the Presto Entertainment subscription service, but Australians who want to watch new episodes of Game of Thrones online can sign up for Foxtel Play.

Foxtel may slash Play pricing again during Game of Thrones, as it did last year, and a permanent price drop could even be on the cards after Foxtel reduced home subscription rates in 2014.

There's an unlikely competitor which could spoil Foxtel's plans: HBO. The US cable TV giant, which produces Game of Thrones, is launching its own online subscription video service in 2015 to coincide with the season return.

Previously you could only tap into HBO's streaming service if you had a home HBO subscription, although some foreigners got around this restriction by paying Americans for access to their account. In 2015 HBO will offer online-only subscriptions in the US for the first time, perhaps opening a backdoor for Australians who already know how to beat geo-blocking to sneak into US Netflix.

The new HBO online service is likely to be cheaper than Foxtel Play, judging by the HBO Nordic streaming service which was launched earlier this year. You can be sure that Australians will crunch the numbers to see which offers better value.

If you value Foxtel Play for non-HBO content then it might be worth sticking with the Australian service. If not, you can try all the tricks that Australians use to get into Netflix to see if they'll get you into HBO. Beating geo-blocking is the easy part, the hard part will be getting HBO to take your money. It will certainly crack down harder than Netflix on foreign credit cards. Pro tip: if you're concocting a fake US address, opt for a state with no sales tax.

The big winners here should be Australian viewers, who will have more options than ever. The losers will be Australian streaming services providers which don't have cash reserves to burn in a war with each other and foreign raiders like Netflix.

Unfortunately this is starting to look like Australian streaming video pioneer Quickflix, which has a significant head start on the competition but is struggling financially. After Quickflix's US investment deal went sour, including an attempted boardroom coup, HBO acquired a 15 percent share in the business. That share was recently sold to Nine Entertainment, perhaps as a defensive move in anticipation of Netflix entering the market.

Of course now Nine Entertainment has thrown its hat in the ring with Stan. Meanwhile Quickflix's latest efforts to raise $5.7 million to stay competitive in 2015 fell dramatically short, netting just over $650,000. It's now in search of other investors to make up the shortfall.

It's a big ask when winter is coming and we'll need to stay tuned to see if Quickflix is amongst the Game of Thrones body count this season.  

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Adam Turner
Adam Turner
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