There was a spike in 'binge-watching' when series two of Netflix's Orange Is the New Black was released in June. But the model is not a one-stop-shop service – which may come as a disappointment to Australians. Netflix has based its business on a huge catalogue of TV shows and movies which are usually a year, or a season, behind the first run of the content. There are some exceptions. As it has grown, Netflix has begun to finance its own television series, such as House of Cards and Orange is the New Black. But the majority of its content is second-run, after broadcast, or considered not premium. "There's a misconception among Australian consumers that Netflix has every movie or television show created available on it," Citi analyst Justin Diddams said.

Netflix has financed its own series, including House of Cards (above) and Orange is the New Black. As revealed by Fairfax Media, Netflix has secured exclusive Australian SVOD rights to the upcoming superhero series Gotham. However, it would not be able to offer the show on its service until a year after the premiere on broadcast, which will be on Nine. While the Australian rights came as part of an international rights deal with Time Warner's Warner Bros, it is the biggest hint yet that Netflix is assembling an arsenal of content for a rumoured launch down under. Netflix has offered popular shows like Walking Dead (above) and Breaking Bad after their seasons end. A representative for Netflix said the company would not comment on its plans for Australia or any other country where it has not launched.

Despite having exclusive SVOD rights to Gotham, if Netflix were to launch in Australia it would be staying true to the business model it built in the US There is no cut-price way of legally watching Game of Thrones, here or in the US. There's a misconception among Australian consumers that Netflix has every movie or television show created available on it. Netflix would also not have the rights to run the same content in Australia that it does in the US and Europe, due to licensing agreements. "Content rights are a minefield. There's a lot of moving parts and a lot of things that content buyers have to navigate. It's not clear-cut how it's going to plan out," Credit Suisse analyst Fraser McLeish said.

Sports, news, first-run drama and big reality TV are more suited to free-to-air or pay TV, while Netflix provides binge viewing, in many cases replacing the need to buy DVD box sets, Mr McLeish said. In the US, Netflix's home market, traditional subscription (or cable) television penetration is estimated to be above 85 per cent. Netflix has grown to about 25 per cent penetration in the US. "There's a belief among investors that there is going to be this new era of television, which sparks the death of traditional broadcasting models," Mr Diddams said. "I'm not convinced that SVOD is the death of broadcast." Australians often complain that they are getting a raw deal in terms of content and pricing, and it's true that local subscription services are more expensive than Netflix – Foxtel recently cut its basic cable pricing to $25 a month, Quickflix charges a basic monthly subscription of $9.99, however, premium movies and television episodes are an additional $5.99 and $2.99 per item respectively; Netflix costs $US8.99 per month. But if consumers are expecting a premium content offering from Netflix, they may be disappointed – as Netflix's local, would-be rivals are quick to warn. "Netflix has done a great job," Foxtel chief executive Richard Freudenstein told Fairfax Media. "They have a couple of fantastic new shows and a lot of older stuff, and that's a business model that's working for them. But you can't compare that with Foxtel and other providers."

Netflix hosts no HBO content, which includes the heavily pirated Game of Thrones. It does have popular shows such as The Walking Dead and Breaking Bad, but they are offered after the season has finished on television. Quickflix chief executiive Stephen Langsford believes streaming will become a big part of viewing for Australians, but platforms needed to offer the right content at an affordable price. While Australians complain about the lack of "cheap", legal options for watching HBO content – especially Game of Thrones – it's worth noting that there is no cut-price way of legally watching Game of Thrones in the US either. It is only available in the US through a traditional pay TV subscription; one of the cheapest being $US29.99 a month with 20 channels, including HBO, through Time Warner, or by bundling HBO with an internet provider. Foxtel is betting that its triple play of cable TV, internet and phone services, which will launch in the first quarter of next year, will be able to tempt Australians, who have held out of getting subscription TV because of price, to sign up. "Triple play makes pay TV more accessible, making it even more compelling from a value point of view," Foxtel chief operating officer Rohan Lund said.

Netflix is a supplement, not a substitute, Mr Lund said, and it faces a tough battle to satisfy Australian viewers. "We think people's expectations for content in this market will be high, so they'll want more currency and quality," Mr Lund said. There is a demand for content and Australians are willing to pay for it, Mr Diddams said. "Australians don't mind paying for content. We spent $6.2 billion on content in 2013, of which $2.5 billion was the direct purchase of physical content, albeit declining year-on-year, but it still highlights the demand." A key argument as to why Australians pirate American TV shows is access to content at the same time it's broadcast in the US; Netflix would not offer any change on that front.

"Let's cut through the marketing hype that Netflix is some sort of programming panacea," Seven Network director of programming Angus Ross said. "The latest episodes of the Australian and international programs that the majority of Australian viewers love will not be available on Netflix." It would be naive for Australian broadcasters to think Netflix does not harbour ambitions to become a one-stop stop for content and to dominate the global television landscape. There is a reason why Australia's big media players are getting their ducks in a row and announcing SVOD deals, such as the 50:50 venture between Fairfax Media and Nine Entertainment; StreamCo, while Seven and Foxtel are rumoured to be in advanced discussions. "The goal is to become HBO faster than HBO can become us," Netflix chief content officer Ted Sarandos told GQ last year.

FetchTV chief executive Scott Lorson said he expects Netflix to enter the Australian market sooner or later, but it won't be smooth sailing. "Netflix is a playing a long game with some very deep pockets and a growing catalogue of their own content," Mr Lorson said. "We wouldn't bet against them in the medium- or long-term, but we do recognise they will have some challenges at launch."