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After struggling against Netflix, Presto is ready to give up

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Netflix was founded when hardly anyone was familiar with the concept of video streaming. However, what started with sending DVD through mail, has today expanded to include millions of users in around 190 countries. The services on offer include video and movies streaming. The company is boosting its global presence as well, making life difficult for its local competitors. Along the same stream, Presto, Netflix’s Australian rival, has announced that it will soon be ceasing operations altogether.

Presto, in case you are unfamiliar with it, is a video streaming service that is based in Australia. The company opened up shop in March 2014, unfortunately, the same month when Netflix arrived in Australia. The companies have both been involved in a power struggle, as each tried to attract more customers its way.

However, it seems as if Netflix’s overbearing global presence has finally forced Presto to cede ground and decide to leave the arena. Presto Co-owners Foxtel — which in turn is half-owned by News Corp — and Seven West Media Ltd have released a statement according to which, the company will end its service on Jan. 31, 2017. The decision to close down the company was actually made by Foxtel, which wielded the Axe after purchasing off its half of stakes in Presto.

While no official reason has been given for shutting down the portal, a significant lack of growth may be behind the  decision. As per Roy Morgan Research, while 1.9 million Australians have paid subscriptions to Netflix,  less than a 10th of the number — barely 142,000 –subscribers have opted for Presto, despite the fact that both the companies have been operating in Australia for almost the same duration.

Speaking on the topic, Brian Han, a media analyst at Morningstar said,

The Australian SVOD market was always going to be consolidated. The likes of Netflix have opened our eyes to how much we were paying for a packaged channel, 90 percent of which we don’t even watch, (and) forced the hand of Foxtel.

Presto subscribers on the other hand will transfer to Foxtel Play in December and Presto will close down on January 31. Well, it does not seem like a lot of users will be affected by Presto’s decision to shut down shop. Meanwhile, this has brought the number of major competitors in the Australian streaming landscape, down to two.


 

A bibliophile and a business enthusiast.

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