Media giants Nine and Fairfax are taking on the likes of
Netflix with a new a $100 million online video streaming
Nine and Fairfax will spend up to $50 million each to
establish the new service, StreamCo, which will give users
access to movies and TV programs on demand for a monthly
Analysts praised Nine and Fairfax's decision to enter the
growing online streaming business, which is the subject of
considerable attention thanks to the success of US-based
"It does look like Nine has finally woken up to the idea that
the Netflix of this world and on-demand streaming is coming
about," IG market analyst Evan Lucas said.
"I see it as a reasonably good step forward."
But Mr Lucas said the success of the service would hinge on
what content it offered.
StreamCo, which is set to launch sometime this financial
year, has already secured "cornerstone" deals with content
providers but hasn't given any hints about the types of shows
and movies it will offer.
Fusion Strategy founder Steve Allen said streaming-on-demand
currently accounted for around three per cent of the overall
television market, though it was growing strongly and would
be boosted by the roll out of the national broadband network.
"It's quite small but it is going to double in the next five
years," he said.
"It's not going to be a large part of the landscape in terms
of dollar, but as the NBN rolls out it is going to be more
and more the thing that consumers are going to demand."
He said the joint venture was a smart move for both companies
and paired Nine's ability to make content and its
relationship with international providers with Fairfax's
experience in running a subscription-based service.
The new venture will have plenty in the way of competition,
notably from Netflix which has an estimated 200,000
subscribers in Australia despite not being officially
available here at this stage.
Other subscription-based contenders include Quickflix, which
has just over 120,000 paying customers, Foxtel's Presto as
well as free services like ABC's iview and Ten's tenplay.
And Nine's arch rival Seven also has plans to enter the
Seven West Media boss Tim Worner on Wednesday said the
company was in talks to launch its own service.
"Over the last few months those discussions have accelerated
and we expect to make an announcement soon but we're not
ready to make an announcement yet," he said.