SYDNEY: The penetration of over-the-top viewing in Australia is set to hit 85% of the total population within the next two years, with smart TVs likely to be the next big thing, according to new research.

Authentic Entertainment, a digital strategy and content creation company, commissioned in-home ethnographic interviews and an online survey of more than 1,700 people and reported that two thirds (65%) of Australians were already watching short clips, catch-up TV services or long-form video online.

Much of this is done on mobile devices, but Jonathan Hopkins, Authentic marketing and strategy director, highlighted the potential for smart TVs. Around 29% of Australians own such a device but few have bothered to connect it to the internet. "It is the next frontier," he told The Australian.

His colleague Beth van Koesveld, Authentic head of research, described OTT as "the new world of viewing" and added that "the brands that are defining (the landscape) are completely different than five years ago".

Prominent among these is Netflix, launched in Australia only two weeks ago. Authentic's research suggests that almost one in five Australians is already using it or intends to subscribe to it. And among existing OTT users, Netflix has the highest brand awareness at 58%, ahead of local rivals Quickflix (54%) and Fetch TV (52%).

There have also been several new entrants into the market – including Stan, a joint venture between Fairfax and Nine, and Presto, a collaboration between Foxtel and Seven – since the research was conducted at the end of last year and which van Koesveld felt would likely face significant marketing challenges to catch up with existing players.

She added that traditional broadcasters also faced a challenge from a changing mindset, especially among the young. One 17 year old was quoted as asking why catch-up TV was called that: "I haven't missed anything."

Fully 86% of 16-24 year olds watch video online, the research found, and they spend significantly more time with this format than regular television, at 30.3 hours a fortnight for the former compared to just 21.5 hours for the latter.

"For younger demographics free-to-air networks don't have the same kudos as they do for the people that were brought up on them," van Koesveld observed.

Data sourced from The Australian; additional content by Warc staff