Subscription game services\ AI in Media\ Data download growth backed by SVOD\ Kogan MVNO growth\ Australian Out-of-Home market outlook

 
 



Welcome to the Venture Insights newsletter!
In this week’s edition, we look at the subscription game services, AI in media, Data download growth backed by SVOD , the growth of Kogan, and the Out-of-Home market outlook in Australia.

CHART OF THE WEEK

Percentage of unlimited fixed broadband plans from 2013–14 to 2017–18 



Source: ACCC Communications Market Report 2017–18

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Subscription game services

Price for selected games by retail channel (£)



Source: ENDERS ANALYSIS

Subscription game services will finally allow platform owners and developers to deliver truly accessible gaming experiences for all, across devices, at a lower entry price point, and curated to ensure consumer safety—both in terms of cost transparency and content types. Consumer comfort with subscriptions should be embraced by the games industry and has already started in mobile. Apple’s Arcade subscription is the test case, providing focused all you can eat games that minimise exposure to violent gameplay, and the ‘free to play’ wild west. Core gamers remain the most vital and profitable games customer segment, but they have been overserved and are an obstacle to broadening the reach of games. Now is the time to move beyond this group, to restructure, expand, and normalise the games market in the next decade. For a more detailed look at the analysis of the subscription game services, click through to read the report from our UK research partner, Ender Analysis.

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AI in Media and Video Consumption

Australian Video revenues by platform



Source: VENTURE INSIGHTS

There have been multiple new entrants in the SVOD market in Australia in recent years, including the entry of Disney+ in November 2019. However, the overall Australian video market has been stagnant with a CAGR of -0.8% over 2019A – 2023F period and the SVOD service providers have been competing to gain market share from their competitors and incumbent video entertainment platforms. In such a scenario, customer retention is important and companies are using AI to make informed commercial decisions, improve efficiency and create better customer experiences. For example, YouTube has had remarkable success in using AI to quickly and accurately scrub illicit content from its platform, with their AI system removing ~75% of videos for violent extremism. For a more detailed look at how AI is changing the consumption of video, click through to read our report.

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Data download growth backed by SVOD 

Total volume of data downloaded from 2014–15 to 2018–19



Source: ACCC Internet Activity RKR data and ABS Internet Activity Survey (8153.0) data.

According to ACCC’s Communications Market report for 2018-19, there has been a 47% increase in data downloads in Australia over the last year. Unlimited data fixed broadband plans have reached 57%, and the data allowance for mobile phone and mobile broadband services have increased by 65% and 118% respectively during the same period. The ACCC sees the rapid take-up of streaming services as a major contributor for this growth. Venture Insights recent Australian Video Market Report predicts SVOD revenues to increase at a CAGR of 12.3% through to 2023. We forecast SVOD penetration to grow to 75% of households in Australia and the number of subscribers to grow to 12.5 million by 2023. For a more detailed look at the Video Entertainment Market in Australia, click through to read our report.

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Kogan MVNO growth

Price has always been a driver of telecommunications services and cheaper services offered by MVNOs is one of the key reasons for their growth in Australia and globally. The Australian MVNO market has grown from 1.5m subscribers in 2010 to 3.2m subscribers in 2018. Kogan recently reported that its active NBN base and mobile customer base had increased by 340% and 5% respectively in 1H20. We expect this growth trajectory of MVNOs to continue and forecast the overall MVNO market share to increase to 18% in 2023. MVNOs such as Kogan are seeing the benefits of cross-selling a range of services including fixed internet, insurance, energy, money etc., which is in line with Venture Insights recent market survey that bundled services are attractive to consumers, especially the younger demographics. For more details, read our Australian MVNO Market Overview.

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Australian Out-of-Home market outlook

DOOH as a percentage of total OOH revenues (A$M, 2015-23) – FY



Source: VENTURE INSIGHTS, MAGNA, RAPPORT, OUTDOOR MEDIA ASSOCIATION

The Australian Out-of-Home market has grown continuously for the past eight years at a CAGR of approximately 9%. According to the latest results from the Outdoor Media Association (OMA), digital OOH revenues account for 55.8% of total media revenue year-to-date, reflecting advertiser trust in the channel and investment into a data-driven digital network. This is in line with Venture Insights’ forecast that the Digital OOH will grow at a 14.3% CAGR, reaching A$993m by 2020 and representing 57.5% of the overall OOH advertising expenditure. Multiple companies have started driving the usage of OOH as an advertising medium and leveraging data to deliver targeted campaigns to fully leverage their digital capabilities. Going forward, we may also see OOH players come together to offer an integrated data intelligence and programmatic trading platform to allow advertisers to target audiences at scale.  For a more detailed look at the Out-of-Home market in Australia, click through to read our report.

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