The latest data from researcher Nielsen shows that 1.2 million New Zealanders now have access to a Netflix subscription.

Nielsen's Connected Consumer Report for 2018 said that this equated to approximately 434,000 households across the country.

This means the Netflix, which makes well known shows including The Crown and Stranger Things, has almost doubled its reach since December 2015, when Roy Morgan research showed that only 684,000 New Zealanders had the service.

Netflix's biggest subscription video on demand (SVOD) competitor in this market is Lightbox, which according to its annual report currently reaches 810,000 New Zealanders via 300,000 nationwide subscriptions.

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According to Spark's research, 44 per cent of New Zealanders were streaming content via SVOD services by the end of last year, and the number is only expected to grow in coming years.

Netflix first launched in New Zealand in March 2015 at a time when SVOD was still a relatively new concept to the market, arriving after Spark's Lightbox, which was launched seven months earlier in August 2014.


Kym Niblock, who was then the chief executive of Lightbox but now serves as chief product and information officer at TVNZ, said the first few years of SVOD in New Zealand were a hard slog in that many New Zealanders were not familiar with the technology.

"It was only when we started to refer to SVOD as 'TV' that adoption rates picked up," Niblock said.

Once people understood that it was just a different way to consume content, they felt more comfortable tapping into the services, she said.

In introducing the product to the market and attracting attention from early adopters, Lightbox essentially laid the groundwork for Netflix to launch into an evolving market, which hasn't yet lost steam.

"We used to call it a maturing market, but we're past that and we're in the middle of mainstream now," Niblock said.

While she commended Netflix for growing so rapidly in such a short period of time, Niblock did question how many of the 434,000 households were actually paying subscribers.

"With Netflix, you have many friends and family members sharing a single account, and that's something Netflix will have to address in the coming year, " she said.

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Regardless of whether accounts are shared or not, the latest numbers do show Netflix has emerged from the niche to become one of the most significant sources of entertainment for New Zealanders.

The growing prominence of streaming is also evident in TVNZ OnDemand, which now has 1.8 million subscribers, and 3Now, which has also grown rapidly since its inception.

This is not to say that free-to-air television has become irrelevant or an afterthought. The most popular television shows of 2017 reveal that certain programming continues to pull in significant audiences.

A total 1.5 million people tuned in to watch at least some of the election coverage last year, and this was further consolidated by the debates which also attracted in excess of a million viewers each.

The rest of top 15 list reads like the browser history of Middle New Zealand, with Prince Harry in Africa, The Royal Variety Performance and The Young Victoria all making the cut.

The popular shows also indicate that television's strength lies in exclusive local programming that you can't find elsewhere.

Netflix has committed to spending $8 billion on content in the coming year, however, it's unlikely that this will involve much local programming, particularly in a country with as little scale as New Zealand.

CULTURAL IMPACT

Niblock said she doesn't see Netflix as killing television, but rather serving as a complementary source of entertainment.

She said that the average overall video viewing time in New Zealand has remained consistent at around two and half hours, but that people are just viewing different types of content in different ways.

She also said there are cultural moments that New Zealanders might want to share in and that some of these might be found on television.

"I might be the biggest SVOD evangelical, but I still want to know who is going to lead the country," she said in reference to the election.

Kym Niblock, the chief product and information officer at TVNZ, says SVOD has gone mainstream.
Kym Niblock, the chief product and information officer at TVNZ, says SVOD has gone mainstream.

This cultural interest, she said, could also involve a local television show that captivates the masses and integrates its way into watercooler conversations.

Other media types have, however, argued that TV's cultural currency – the impact of the channel on TV – has declined significantly in recent years.

In an interview last year, Facebook's group industry director for Facebook Australia and New Zealand Paul McCrory said that television no longer has the cultural sway it used to.

"What used to be a case of the family gathering around the television doesn't exist anymore because people are exposed to about 2,000 different media messages every day," he said.

This is certainly evidenced in SVOD habits, which often result in different members of the family watching different content on different screens throughout the house.

This, in turn, means that our culture is increasingly influenced by a varied range of sources – and this has significant ramifications not only for watercooler discussions but also for businesses looking to integrate their names into the culture.

"Brands used to be made famous on TV, but they're not made famous on TV anymore," McCrory said.

"TV has done an excellent job so far, but it's not your fame-maker anymore. It doesn't have your cultural capital, because the audience isn't there."

The question then is how do you integrate something into the culture when everyone is consuming different things on different devices at different times – particularly when you now have consumers paying not to see advertising.