The biggest rival Netflix faces when it launches in Australia and New Zealand in March this year could be Netflix itself.

The SVOD giant already has an estimated ~200,000 customers in Australia, plus up to 35,000 more in New Zealand – all paying subscribers to its domestic service in the US, masking their country of origin with workarounds such as virtual private networks (VPNs).

The local leader in both markets is Quickflix, a local DVD rental and video streaming service. Netflix’s footprint already eclipses the incumbent however, without lifting a finger.

The main challenge for Netflix could be persuading current customers to switch, especially for the first year or two, to a local alternative. Initially program choice will be more limited than the US service, with no mention of signature original shows such as Orange Is The New Black, which Netflix has sold to a pay-TV platform, Foxtel, in Australia and to a free-to-air broadcaster, TVNZ, in New Zealand. Choice should expand over time.

Broader competition is firming up too. In Australia, Foxtel is planning to bolster its paid online movie offering Presto with TV shows, after halving the price of a subscription in August last year, five months after launch.

Meanwhile, free TV network Nine has teamed up with newspaper publisher Fairfax to create a US$85 million SVOD JV called Stan, likely anchored around non-exclusive back-catalog programming. Australia’s other two major free-to-air networks, Seven and Ten, are also eying entry into the market.

In New Zealand, incumbent pay-TV operator Sky is in process of launching its own paid online service, Neon, while leading telco Spark pushed out its own offering, Lightbox, in August last year.

There is room to grow, especially by nibbling into a contracting but still sizable DVD market. Both sales and rentals have fallen in other markets, once SVOD services take hold, but data caps, common in Australia, and broadband connectivity barriers can slow uptake.

So far, the only countries in APAC to generate significant SVOD revenues are China and Japan. If all goes well, Australia should be next.

A version of this article also appears in the Q4 2014 edition of Media Business Asia magazine.