Social media policy developments suggest misinformation may now spread more rapidly. MD Foad Fadaghi says ads, plus AI personalisation, integration and format innovation, will power the next cycle but streaming growth has peaked. There's only going to be a certain number that can be supported. Tech and telco analyst Telsyte is usually closer than most on streamer subscriber numbers and growth. Its latest data shows they are almost all growing, though some are feeling the effects of gravity. Amazon, estimated to have 4.
Now they have to get more creative. Fodaghi thinks that will require investments in smarter AI-driven experience and content recommendations, more immersive experiences — such as 3D movies, bundling gaming into the platform, as Netflix and others are pursuing, as well as going harder on their own marketing investment. With incumbent media owners trimming costs, now could be an opportune moment. In terms of revenue growth, the big platforms ramping up ad businesses see one major opportunity: selling ads.
I don't think anyone will be launching before Christmas, but it's definitely coming. So it's interesting when you talk about a crowded marketplace and that end of that first growth cycle, because what we're going to see is probably twice as many providers in market at that top end before we get to this time next year. Hence Kroon backing streamers to double their ad takings in Who's winning? They have come to market with scale; both have sales teams; both have sophisticated data infrastructure Nine has held out on launching ads on Stan.
Its argument is partially that advertisers can already target those subscribers on its BVOD channels. Most importantly from our perspective, they have a really sophisticated at-scale sales infrastructure, which means they could make really good money from an ad tier. While there is often merit in zigging when the market zags, and cannibalisation of BVOD and TV ad sales is a genuine risk, twitchy shareholders might back that view, given they are 37 cents on the dollar down so far this year.
Either way, Kroon thinks Australian market dynamics favour — and will reward — those with strong media sales capability. We are dominated in this market by a small number of players. That's why I think Stan's a good one, because they've got infrastructure. We forecast it to grow massively again because of that Amazon activity. By , we think [SVOD penetration] be up to close to 10 million [households], and a bit more than a third of subscriptions being ad supported.
