Demand for subscription video on demand (SVOD) services delivered over the Internet is booming, with 2.7 million Australians already signed up with active subscriptions to the services, according to the latest report from analyst firm Telsyte.

The 2.7 million subscribers represent a growth rate of 46% over the same period in 2015.

According to Telsyte, 43% of Australian households now subscribe to either pay TV or SVOD services, a 4% increase on the previous 12 months, while the average number of SVOD subscriptions per subscribing household has increased from 1.5 to 1.7 during the same period.

And, Telsyte reveals that the total number of paid (excluding trial users) SVOD subscriptions is now on track to more than double from 1.9 million in June this year to 4.1 million in June 2019, when it is expected to exceed the total number of pay TV subscriptions in Australia.

The report also reveals that, as of June, pay TV has a total of 3.3 million subscribers and Telsyte says it will continue to enjoy a healthy revenue lead over SVOD.

According to Telsyte, Australians’ “insatiable appetite” for streaming content opens the door for third-party players like Google, Apple, Telstra, Sony, Samsung and others to consider their content service strategies. And, the analyst firm also says it believes the ability to universally search across multiple service providers, including on smartphones and smart TVs, will be a “compelling way for people to access SVOD content in the future”.

SVOD now takes up 30% of a subscriber’s mobile data allowance and Telsyte reports that mobile SVOD subscribers typically have a 65% larger net data cap than those who do not stream SVOD on mobile.

The analyst firm estimates SVOD subscriptions would have grown by almost 900,000 during the 12 months to the end of June and, through high conversions from free or trial usage to fee paying subscriptions, SVOD services are also generating around 40% more revenue than 12 months ago.

Telsyte lists the paid subscriber market leaders (in order) as Netflix, Stan and Presto, and says that together the top three providers represent around 85% of all subscriptions – however, “there is a long tail of providers covering sports and special interest niches like NBA basketball, UFC matches and AFL”.

The local SVOD market has entered a new phase with the top three competitors more aggressively seeking exclusive content rights deals, the report notes.

And, despite Netflix exploding onto the scene, Telsyte says local players Stan and Presto have been growing faster than Netflix in the past 12 months as “appetite for more content drives people to adopt a second or third provider”. One in five Netflix customers has more than one SVOD service, according to Telsyte.

Telsyte managing director, Foad Fadaghi, says current SVOD subscribers are at the leading edge of display technology with 1 in 4 indicating an interest in video content delivered through virtual reality (VR) headsets.

And, in the living room, SVOD users are twice as likely to own a 4K TV and 20% have already shown interest in streaming 4K content over the nbn.

“New services such as VR and 4K streaming could redefine SVOD services, especially for sports-related content and have the potential to lift monthly spend,” Fadaghi says.

“Telsyte research across industries has shown that consumers are prepared to pay more for entertainment content such as movies, interactive games and streaming sports provided in VR.”