The Australian video-on-demand market continues to shift, with growing adoption of ad-supported models, changes in subscription stacking, and evolving platform preferences shaping consumer behavior. The latest Entertainment on Demand (EoD) data uncovered the following behaviours within the Video on Demand (VoD) on the Australian market:
- Ad-supported (AVoD) tiers are now in 30% of all households, a figure that has more than doubled year-on-year, from 12.5% in Q1 2024. Around 1 in 5 (22%) new subscribers signed up to an AVoD plan in Q1 2025, rising to 1 in 2 among providers that offer an ad-supported tier.
- Ad-tiers are growing in popularity among new Netflix subscribers, up from 42% last year to 60% in Q1 ‘25.
- Paid, ad-free streaming (SVoD) now only reaches 68% of households, down from 72% a year ago. However total paid streaming continues to reach 75% or 7.9 million Australian households.
- The average number of subscriptions a VoD household owns is up from 3.0 last year to 3.3 in Q1 ‘25. 22% now hold 5 or more subscriptions, up from 20% a year ago. Affordability of emerging AVoD services has aided the growth in stacking, with 31% of AVoD customers holding 5+ VoD subscriptions, well above the category average.
- Paramount+ gained the highest share of new subscriptions in Q1 ‘25, with Prime Video second and Apple TV+ third.
- The most popular and viewed title of the quarter went to Prime Video’s crime thriller Reacher, with second place taken by Paramount+ and Taylor Sheridan’s Western drama 1923.
Worldpanel Entertainment On-Demand provides insights into the subscription market, combining quarterly tracking of installed base and new subscriptions with analysis of purchase motivations, customer experience, and subscriber retention.
Paramount+ rise led by 1923, affordability and stacking
The Season 2 drop of 1923 helped propel Paramount+ to the top of new subscriptions taken out in Q1 ’25, along with Landman, another Taylor Sheridan Western proving popular with Australian viewers, after the long-term success Stan has enjoyed with exclusive rights to Yellowstone. Specific content continues to be the top driver of new subscribers to Paramount+, however, perceived value for money has grown in recent quarters to become the second most cited reason to sign up.
Those looking for value are more likely to have chosen the ad-supported tier which, at $6.99, provides an affordable option against a VoD category average of $15.36. Since its launch in June 2024, the ad-supported tier has grown to reach 30% of Paramount+’s users and contributed to a 13% YoY increase in total subscribers, one of the highest growth rates recorded by the major services. However, Paramount+’s affordability also means customers are more likely to be shared across a higher number of services: its subscribers stack an average of 5.1, which brings a greater risk of rotation.
Increasing satisfaction with content, both TV series and films, has helped Paramount+ record its strongest Net Promoter Score (NPS) of the last five quarters (14ppts). However, this remains below the category average and Paramount+ still suffer from one of the highest churn rates of the major services at 21% over a quarter. One area in which Paramount+ scores below-par is the user interface (UI); however, UI satisfaction is much higher among the 12% of subscribers who access the service via Prime Video channels, with NPS also higher at 35ppts. Widening the collaboration with Prime Video could be the solution to both increasing retention with an improved UI, and unlocking future growth via the three quarters of Prime members without Paramount+.
Netflix’s legacy subscriber transition from Basic ad-free to ad-supported presents challenges
Netflix continues to enjoy the lowest churn rate of all video streaming providers in Australia – however, those on an ad-tier are more likely to switch off Netflix, with churn of 8%, +2ppts higher than ad-free subscribers. Whilst NPS is still well above the category average for Netflix AVoD users at 28ppts, it trails that of ad-free customers (32ppts). Unsurprisingly, the amount of ads is the key driver of their dissatisfaction, although this is somewhat offset by an exceptionally high level of satisfaction with value for money, almost double the VoD category average.
One cohort within the Netflix AVoD base that has a sliding NPS is those customers who were previously on the Basic Ad Free Tier until it was discontinued in February, and were automatically switched to Basic with Ads. Their previous NPS was strong at 34ppts but fell to just 24ppts after being pushed to an ad-supported service. Despite the lower monthly cost, one of their top pain points is value for money, likely driven by the introduction of ads to a service they are still paying for. Their decision now will be whether to endure the ads and stick with the $7.99 AVoD service, or make the significant leap from their previous $10.99 monthly outlay to enjoy a service without ads at $18.99. Of course, their third option could be to cancel Netflix altogether and substitute it for a new service that fits their budget in the ongoing tough economic climate.
Binge navigates HBO loss with new sports and local content
In Binge’s final quarter with full Warner Bros. Discovery content, its new subscriber share was down slightly -1ppt quarter-on-quarter to 9%, whilst its total subscriber base growth also slowed to +3%, from +10% last quarter. Of those newly acquired customers, Binge secured 7% of them on an annual subscription, leaving the remaining 93% on a monthly plan, making the service more susceptible to losing viewers in the short term when HBO programming vanishes. As expected, the planned cancellation rate for Binge grew from 12% in Q1 of 2024 to 13% this quarter, behind only that of Apple TV+ which sits at 17%.
NPS for Binge is relatively weak at just 9ppts, with net satisfaction for original content and quality of TV shows falling this quarter. These are both areas where Binge will have large gaps to plug in Q2 ’25 as it loses all of its HBO content with the exception of The White Lotus, which ranked as the third most enjoyed title of the quarter. One approach Binge has taken to address this is introducing live and on-demand sports content to the service. This is yet to have a positive impact on subscriber satisfaction, however, with lack of consumer awareness a potential factor, in addition to nearly a third of Binge customers already having a Kayo subscription.
However, the addition of sports content on Binge may help drive new customer acquisition, with both sport and live streaming growing as feature drivers among total new VoD subscribers this quarter, along with local Australian content. This is another area Binge will look to pivot to this year, with a handful of local originals such as The Last Anniversary and Mixtape debuting in 2025.
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