What does BritBox need to do to succeed in Australia?
After launching in the UK and then testing the market in North America, ITV and BBC-owned OTT platform BritBox headed to Australia in March 2020, the next largest English language market in the world.
It chose Australia because the market is similar to the UK and hosts a huge expat community. Presently, 1.2 million UK citizens are residing in Australia, making it one of the more significant market opportunities for a service like BritBox outside the UK.
Mitch Incoll, the strategy director at R/GA Sydney, believes that for a global entertainment and subscription-based business like BritBox, there is room to grow in Australia given the country’s current penetration levels.
“Over a third of Aussies identified as being from English descent, according to Census 2016, so it’s fair to say the content has a natural cultural fit. The BBC has long-established equity and relationships via Foxtel and ABC broadcasting. Britbox will complement this with more of what we already love,” Incoll explains to The Drum.
“A high proportion of Aussies are more willing than most countries to spend on entertainment and subscription services. BritBox already has some learnings from North America (2017) and U.K (2019)- making Aussie launch a little less risky and a little more efficient.”
According to Statista, Australia revenue in the subscription video-on-demand (SVOD) segment will amount to US$157m in 2020. Revenue is expected to show an annual growth rate of 10.2%, resulting in a market volume of US$231m by 2024.
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User penetration is 20.5% in 2020 and is expected to hit 22.5% by 2024 and Telsyte forecasts Australians will hold more than twice as many SVOD subscriptions (22m) by the end of June 2022.
Victor Corones, the managing director for Magna Australia, suggests to The Drum that BritBox sees this as an opportunity for growth and to build direct relationships with consumers in a rapidly changing market like Australia.
“Building relationships directly with consumers is an opportunity that many content creators now seek. The combined forces of these two content producers do make them a worthy global competitor against the likes of Netflix, Amazon and Disney+,” says Corones.
“It is an opportunity to create and grow new revenue streams previously not available to them.”
Another reason Australia was chosen is that the country is often viewed as a test market by international brands and media organisations, according to Lee Walsh, the vice president for media activation in Asia Pacific at Essence. This is because the country has a mature media landscape with many similarities to Western Europe and the US.
Breaking through the OTT crowd in Australia
While it becomes harder to break into the already-crowded OTT space with a subscription model, Charlie Butterfield, design director and partner at Fst believes the BBC and ITV were “banging out awesome content series” way before Netflix became a provider.
He also pointed out both brands have always understood how to relate content to their audiences, adding that he has yet to watch anything as good as Luther and if Netflix is Instagram, BritBox is Kodak – pure, original, real, quality.
“In Netflix, you have a huge choice to find something you might like. But with the old broadcast series, BBC and ITV had to rely on understanding their audiences. This is the key difference. The BBC and ITV relied on understanding their audience and their behaviours when creating content that was captivating for a mass audience. Netflix does this to some degree but it is more of a library than a catalogue,” he explains to The Drum.
“There is also great satisfaction in choosing something that you know. There is real anxiety around dedicating your time to an original. With BritBox, success is proven. You can scratch that familiar itch and relax without the uncertainty and anxiety of your choice.”
He adds: “There is also a cultural shift for nostalgia. A forced connection, fake news and over-editing have left us all seeking authenticity. As a society, we are looking back for comfort as well as forwards for excitement. BritBox has found a place for that calm, offering the comfort of what we know with no surprises. Pure leisure.”
However, significant challenges for BritBox in Australia lie ahead as it will not only have to compete with other SVOD services but also Australia’s vibrant ecosystem of free-to-air broadcast video-on-demand (BVOD) channels, according to Juliette Stead, the senior vice president for Asia Pacific at Telaria.
This is because Australian broadcasters embraced OTT early on and viewers have enjoyed free, professionally produced broadcast-quality programming over an Internet connection for years.
“With a host of premium TV they can watch without a monthly subscription, Australian viewers will need a strong value proposition to sign up for new SVOD services,” she tells The Drum.
Corones agrees, adding that it remains to be seen if BritBox will upstage its two biggest Australian partners ABC and Foxtel as a lot of the potential content sitting across Britbox already sits on SVOD services such as Netflix, Stan and Foxtel as well as several free to air terrestrial TV networks.
“Netflix was the initial disruptor and has managed to secure the lion’s share of the Australian market. Other entrants have not managed to come anywhere near that success,” he explains.
“BBC and ITV, to ensure the success of Britbox, would need to re-evaluate their current distribution platforms in Australia. It will be essential to differentiate the offering and value from the service compared to content already available.”
He continues: “Britbox’s should and will attract an audience. Their appeal is quite different from the other streaming services. The content should be a clear differentiator from the expected, heavily skewed US-centric content that fills many SVOD services. The type of programming on Britbox will be a fair bit different. They will do well against an older demographic. They are strong with kid's programming, particularly of the more educational and younger variety. They will offer something different.”
Then there is ensuring usability and quality of experience when using the service. Steve Miller-Jones, vice president of edge solutions and solution architecture at Limelight Networks explains poor streaming that is characterised by re-buffering or errors where streams stop or experiencing lower than expected quality are critical success factors.
"Recently, we conducted a study on online video consumption patterns, The State of Online Video 2019, and found that video rebuffering (when the video pauses during playback so it can reload) is the most frustrating aspect of watching videos online. Most viewers will wait out a single rebuffer before they will stop watching but after a second rebuffer, 66.3% of people will abandon content," he says to The Drum.
How will Britbox convince Australians to sign up?
To convince viewers who are already overwhelmed by content choice and feeling subscription fatigue, many OTT platforms have adopted hybrid models with both AVOD and SVOD options, as opposed to pure SVOD.
While new platforms may debut as subscription-only, they may introduce a free and ad-supported tier to attract viewers in order to achieve scale.
Incoll says he expects BritBox to have sufficient spend to maintain broad awareness amongst the category and competition, However, as there will likely be a very limited range of new BritBox content ready for 2020, he reckons its subscription segment in 2020 will likely be Aussies already familiar with its programs and want more of it.
“I imagine them to be a bit of a Frankenstein between an SBS, ABC and Foxtel type of viewer. There’s a bit of a premium lens to it but also confident enough in its programs to lean into its niche,” he adds.
Jessica Miles, business director for Australia and New Zealand at Integral Ad Science, notes BritBox’s target audience is 25 to 54-year-olds already subscribed to streaming services.
She says recent research from YouGov, sampling 1,010 adults, indicates that 23% of people would be interested in subscribing to BritBox, a figure which doubles when people are already subscribed to a different streaming service.
Concurring with Miles, Corones says globally, consumers appear to have an appetite to accommodate up to three to five subscription streaming services, which is no different in Australia.
He argues the challenge for BritBox instead, is to ensure they are always a top-three consideration for households for long-term viability. That is hugely dependent on their content pipeline, well-known back catalogue and established franchises.
Is having localised content important for BritBox?
There is definitely a place for localised content, but Incoll does not think it will be a priority for Britbox as Australians like himself love local content but as a culture, they definitely look outward to global markets for most things, not just entertainment.
Britbox’s key differentiator is that they have the largest collection of British TV on streaming, adds Stead, which means they will likely stick to that message going into the Australian market.
“The cost to produce premium content is very high so until BBC and ITV see significant interest, they may hold off on producing local content in a market that they are just entering,” she explains.
While he too believes localised content is unnecessary initially, Corones predicts BBC and ITV will review their content release windows across Australia’s content platforms and decide the optimum way to monetise their content moving forward. They will need to be aware that existing contracts are likely to impede the immediacy of that transition.
“There are growing choruses, from the local terrestrial TV networks, that SVOD services should be subjected to the same local quota content requirements. Should that change, Britbox may need to identify and align with local content producers,” he adds.
At the end of the day, brand loyalty for a streaming service boils down to having great content and a high-quality user experience that viewers want to come back to.
For example, Walsh points out HBO without ‘Game of Thrones’ or Netflix without ‘Breaking Bad’, and now ‘Better Call Saul’, would have very different subscriber bases.
BritBox needs to know its place by being authentic, relevant and personal, and not looking to rival the likes of Netflix and Apple. Instead, they should offer something entirely different. A good example is Spotify, which looks to hold the best library and recommend content on its platform.
Spotify does not ‘create’ music and is just an excellent directory with brilliant UX. It is not all about original content if you have tons of great stuff in your back pocket – the key then becomes making sure people can find it. Profiling its users and offering them very tailored content based on their likes and dislikes could be a good strategy.