Netflix zaps film and TV downloads

15 November, 2015 by Don Groves

Not only is Netflix creaming Stan and Presto, the US streaming giant's Australian service is causing a decline in the legitimate downloads of movies and TV shows.

The latest Roy Morgan Research (RMR) study shows 9.1 per cent of people surveyed downloaded a film or TV show in a 4 week period in April-September, compared with 10.8 per cent a year ago.


“Australians have been notorious for their high levels of illegal downloading,” says Tim Martin, RMR general manager-media. “While our figures of course include legal downloads, it is notable that the younger, tech-savvy people most likely to download TV shows and movies have been the quickest to subscribe to Netflix—and the overall rate of downloading has declined.

“A year ago, just over one in five 14-24 year-olds downloaded TV shows or movies in an average month—today, around 22 per cent of this group lives in a Netflix home, and the rate of downloading has fallen sharply to 15 per cent.”

The study shows Netflix is also contributing to the systemic decline in DVD sales and rentals. It estimates 19.3 per cent of people bought a DVD and 12.4 cent rented one in an average three-month period in the six months to September 2015—down from 20.6 per cent and 15.3 per cent respectively a year earlier.

Commenting on the figures, Australian Home Entertainment Distributors Association CEO Simon Bush tells IF, "Australians enjoying quality content in the home is not a surprise to me and Netflix’s purported success is evidence of that as is Australians still purchasing quality new release and catalogue films and TV box sets on DVD, Blu-ray and digitally. I strongly believe in consumer choice and paying for legitimate content in any way they choose.”

RMR's findings are consistent with a study released in October by the IP Awareness Foundation (IPAF) which showed an overall decline in piracy which it attributed to a combination of awareness of the new copyright legislation, the Dallas Buyers Club litigation against ISPs and the launch of new streaming services.

However IPAF executive director Lori Flekser tells IF, "We were thrilled to see a slight decline in piracy rates but believe that there is no room for complacency as our study showed that persistent pirates continue to maintain high levels of frequency with 40 per cent claiming to be pirating more than they did 12 months ago."

According to RMR’s tracking for October,  the number of homes subscribing to Netflix rose by 11.4 per cent to 1.039 million, equivalent to 2.677 million people.

Last year over 7 in 10 Australians lived in a home without any paid TV service; as of October, this had declined to 58 per cent.

“The trends suggest it may not be long before the majority of Australian homes are paying for TV content through one or more pay or subscription TV providers,” Martin said.

“The impacts of Netflix, as well as Foxtel’s broadening range of options and now Telstra TV, will be felt across multiple areas: from the reach of commercial television and how much time we spend watching free-to-air channels, to our internet data limits and uptake of the NBN, sales of DVDs and Blu-Rays, and our attitudes to what content we’ll pay for and what we expect to get for free.”

RMR’s Netflix estimate almost certainly is conservative as some industry executives believe the number of subscribers is close to 2 million.

In October, Nine Entertainment reported Stan had between 150,000-200,000 paying subscribers at the end of August, more than half way to its December 2015 target of 300,000- 400,000 active subscribers.

By some estimates Presto had fewer than 100,000 subs but that will shoot up following Foxtel’s decision to offer the service free to Foxtel platinum subscribers from November 10.