Communications report 2011–12 series Report 1—Online video content services in Australia
Drivers and barriers to OVC access
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- Bundling, discounting and willingness to pay
- Willingness to pay for OVC services
- Main barriers to accessing OVC services
Drivers and barriers to OVC accessViewing flexibility and financial factors appear to be the strongest incentives for consumers to watch video content online. A Nielsen survey of those accessing OVC of any kind found that the strongest motivator was the ability to watch at a time suitable to them (Figure 9), nominated by over two thirds (68 per cent) of those surveyed. Forty-three per cent were attracted by the ability to control the time required to watch a program, especially the ability to pause and come back to a program at the viewer’s convenience. Almost half (47 per cent) stated that they were attracted to the service because it was free-of-charge, underlining the market split between catch-up television services offered by FTA operators and user-pays IPTV services such as Fetch TV and FOXTEL IQ2.
Bundling, discounting and willingness to payDiscounts, value for money and the convenience of dealing with a single service provider are the main reasons consumers consider bundling their communications services. Specifically, more than two thirds (67 per cent) of those bundling two or more communications products in June 2012 attached a level of importance to cost-saving and/or free services from service bundling.91 While bundling of OVC services is still in its infancy, several ISPs including iiNet and Optus are providing IPTV services bundled with home broadband and fixed-line telephone services for no extra cost.92 At June 2012, approximately 14 per cent of consumers in Australia with a bundling arrangement included a pay TV service.93 The effect of such pricing strategies on online video service take-up is not clear. However, with almost half of online Australians attracted to OVC because it is free-of-charge, it is likely that bundling and other price discounting strategies will be an effective future incentive to those already with a home internet service. Willingness to pay for OVC servicesACMA research shows that in June 2012, 49 per cent of Australian internet users who are intending to access OVC services stated they would be willing to pay to access those services (Table 13).Willingness to pay increased with income levels, and men were more willing to pay for content than women. Those aged between 25 and 54 were the most willing to pay for video content. The fact that nearly half of those intending to access OVC in the next six months reported that they would be willing to pay for online content is indicative of a potential market waiting to be tapped. The degree to which the intentions are realised will likely depend on factors such as price incentives and the range of content offered by industry beyond that offered on FTA television.
Main barriers to accessing OVC servicesWhile the majority of household consumers have access to the equipment required to stream or download OVC, over half of internet users in Australia aged 18 years and over were yet to have used these services at June 2012. Figure 10 shows that the most frequently reported barriers to using OVC services were ‘no need’ or ‘no interest’, ‘no time’ and ‘don’t know how to access services.’
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