For a country with a relatively modest population heading towards 27 million people, Australians don’t mind spending considerable sums of money to keep themselves entertained. Certainly, when compared to various other first-world countries around the world.
Simply put, the entertainment and media segment in Australia is big business, and in this country, the average household spend $4,500 each year on this portion of their leisure activities. Given the average household brings in around $121,000 AUD per year, that’s a sizeable chunk of spending, particularly for something that many people don’t consider to be one of their essential outgoings.
The entertainment and media segment itself is broad and varied, covering a wide range of activities and leisure pursuits, although two in particular are achieving outstanding performance in the Australian market.
Gaming Reaches a Whole New Level
Everyone remembers the early Super Mario games, as the lovable plumber climbed up those pixel platforms, bouncing his way through the levels. But this isn’t the kind of levelling we’re talking about, more so the impressive thresholds of success the Australian games industry consistently breaks through.
Back in 2017, the games industry accounted for 21.6% of the Australian entertainment and media market. Based on projections for continued growth, that piece of the pie will account for a bigger portion by 2026, when gaming is expected to account for 27.9% of entertainment revenues. Individually, only streaming can boast such a comparable percentage of the overall entertainment market.
That’s quite a significant and sustained leap in the space of one decade, although gaming also dovetails with various converging channels, including movies and music. Another is the iGaming sector, providing everything from real money Australian online casinos to the spinning reels of pokies, alongside the sizeable sports betting arena.
Sometimes, there’s confusion regarding what defines the “gaming” and “iGaming” sectors, even extending to whether they are different markets or one and the same. Nevertheless, these two entertainment niches are thriving, currently estimated to be worth in excess of $11 billion AUD combined and expected to enjoy further growth in the coming years.
The Battle for Streaming Dominance
Changing technologies have revolutionized the way Australians consume their entertainment, especially when it comes to TV and movies, while music is often considered a media segment within itself. The principal reason is that instead of buying DVDs and CDs from retail stores, the overwhelming majority of digital media is now available as Entertainment on Demand (EoD), via streaming services through our internet and mobile connections.
The largest sub-sector of EoD is Video on Demand (VoD), and in Q3 of 2023, 7.26 million Australian households had access to at least one of the major streaming services. Competition right now is fierce, particularly as the biggest streaming providers jostle for position, following a significant downturn in late 2022 and early 2023. While the segment itself is recovering, it’s not without an interesting caveat.
Consumers are increasingly weighing up the importance of value for money, which sparked an intriguing rise in both cancellations and new sign-ups during Q3, as users terminated costly subscriptions and shopped around for better packages and free trials. Netflix took the biggest hit, after introducing password sharing restrictions and additional fees in Q2, although the new ad-supported tier does appear to be generating interest.
Binge and Stan achieved the strongest growth in Q3 but remain some way behind the biggest streaming services. Netflix continues to remain top of the pile, halting a swift decline earlier this year, after introducing account-sharing restrictions. Prime Video appears to be holding steady, while Disney+ gained more subscribers. Binge and Stan are bouncing back, although steady previous growth for Paramount+ has now dipped into decline.