What Will The 340,000 Australians Already Using Netflix Do Now?

New research by CHOICE suggests that 340,000 Australian households are already paying to access the US version of Netflix. What will happen to those customers when Netflix officially launches in Australia next year?

Picture: Getty Images/D Dipasupil

CHOICE's figure is the highest estimate we've seen so far for the number of local Netflix users. It's based on a sample of 1046 people, weighted to match census profiles. Netflix was by far the most popular choice of the 684,000 households which the survey suggests access some form of legal content from overseas (other options include Hulu and non-Australian iTunes stores).

Paying to access Netflix from overseas is a minor hassle, since you'll need a VPN to get around Netflix's geoblocking, and you'll often have to pay an additional monthly fee as well. But that clearly isn't dissuading many of us.

So the question remains: what will happen to those customers once Netflix is officially available in Australia? The scenario many people are hoping for is that nothing changes and they can still continue paying for a US subscription.

We imagine many people would prefer to keep paying for the US version, since it's clear that Netflix Australia won't have exactly the same range of content on offer. In many cases, existing rights deals with Foxtel and local TV networks will mean Netflix won't be allowed to offer some movies and shows, even if it does so in the US.

That could even be the case for shows Netflix produces itself. While it appears to have stopped selling the rights for House Of Cards to Foxtel, for instance, Orange Is The New Black may well still be on Foxtel first.

However, it seems rather unlikely that Netflix will simply ignore those customers. On the most venal level, we're expecting Netflix to charge a little more than the $US7.99 a month Americans pay. Why would it willingly give up extra revenue? It's a business, not a public service.

Netflix will also be under pressure from content creators to honour its deals. Right now it's possible to argue that it's better for Netflix to turn a blind eye to Australian customers and let them sign up, since that still means people are paying something for content. That becomes more complicated when those customers could be paying the official local service, and doubly so if programs that are on Netflix in the US end up on Quickflix or Stan here in Australia.

So how might Netflix go about identifying Australian customers? The most obvious approach would be to identify customers paying with an Australian credit card -- a simple matter given their payment address will be on record -- and then suggesting to them that they should migrate to the Australian plan instead. After a grace period, they might be shifted automatically, or have their account cut off.

Viewers could be better off in some ways with a local service. Not having to pay for a VPN service could mean your total expenditure on Netflix is cheaper, even if the local rate is higher. Performance is also likely to improve -- using a VPN often slows streaming services down. The question will be whether the range of titles is broad enough for people to feel happy with that change.

We did ask Netflix itself what its plans were for its existing Australian customers, but it declined to comment. Chances are we won't know exactly what's going to happen until after launch date. But it would be risky to assume if you're already a Netflix customer that nothing is going to change.

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Comments

    not go with foxtel :)

    on netflix, it depends.
    I don't pay for a VPN, i just use the Chrome extension Hola, so that doesn't worry me.
    the thing that will get me to move is the CONTENT, will i be able to have access to what I already have now? or will it be limited due to other rights that have been sold off to other companies?

      Do you then just cast it onto your TV? Or just watch on your computer?

        currently:
        my room, my computer is connected to my 32" TV, so that is all good.
        brothers room, they have the same setup as mine
        lounge is a normal tv, but has a laptop connected to it without a screen working as a media centre

    I won't mind too much if they force us onto the Australian plan, as long as we can continue to use Getflix to switch between regions if we feel like it.

    I'd happily switch to the Australian version if it's not as crippled like the canadian one... but it probably will be. In which case it'll be a decision between paying extra couple of $ for unblocking vs probably paying an extra couple of $ in australia-tax.

      What do Canadians do?
      If their version sucks, as you claim, are THEY setting up account with the US version?
      How the US treats Canadians should indicate how they intend to treat us, on this point...

    It's not hard to guess what will happen. Just take a second to look at other countries that have watered-down versions of Netflix.

    Netflix determines the content available based on IP, not on your account.
    When people in Canada, for example, got their watered-down version of Netflix, all it meant was that they could pay for the local version, but continue faking their IP address to get the complete US deal.
    Moreover, there's no VPN necessary (at this point in time). Contrary to what the article says, all you need is a DNS spoofer (eg. Hola). Only the initial requests need to go through a US IP address; the content itself will still happily travel to an AU IP address.

    In short, we'll be able to do the exact same thing as we are now. The only differences will be the price and that you won't have to fake a US address.

      but, a ford dealer in Beverly hills is a good address to have ;)

      Its because of this that I hope a lot of people swap over to having an Australian account, but continuing to use a DNS spoof or VPN to watch the content they want that is not available locally. The way I look at it, if Netflix sees a huge number of Australian users, they will put more money into getting more content for Australian users than if they see a lower number of Australian users.

    I'm told by an intl distributor friend that although they would never say it publicly, Netflix don't care which intl door you come through, 'as long as you come through one of them'. Which ain't great for the ATO, I guess.

    They're basically building a global TV network. And for all the warm fuzzies they give people, make no mistake - they will be a major corporate studio along the lines of Fox.

      Good, the bigger they get the more great content they can make. I'm happy to pay for a good service.

    Answer: they will keep using it. Then, if they are forced to change, many people will just go back to piracy where many of them come from, out of spite about feeling ripped off by the copyright cartel.

    It's the same reaction I had when Hulu started blocking VPNs: I just stopped paying Hulu.

    If netflix make the change voluntary, those using it now can switch over to the aussie service just to have a legit billing address, prevent US/AU currency fluctuations coming into it and for the convenience of being able to get some Australian content as well.

    Any netflix user worldwide can switch to any other netflix territory and use that country's netflix.

    Largely though, they will still use a VPN and switch to the US Netflix to watch the large majority of content that won't be available here.

    I'd like to see netflix get the rights to stream some "daily" shows like Neighbours. (but that will probably never happen)

    It will be very interesting to see what they give us that is so "Aussie".

    Anyone who thinks all these streaming services can really have a dent in piracy though needs to take a look at the frontpage of torrentfreak this morning.

    New data from sandvine (a internet stats/monitoring company) shows bittorrent traffic accounts 50% of uploads and 30% of download traffic in the Asia Pacific region.

    That's not a survey, that's real data and a 50% growth in the use of torrents mean people could just keep with "Channel BT" like they are now.

    Last edited 21/11/14 9:41 am

      That's not a survey, that's real data and a 50% growth in the use of torrents mean people could just keep with "Channel BT" like they are now.
      However with the new government monitoring, more news stories about people being caught, more torrent indexing sites going down, and more legal action against ISPs, that could very well change

        I'm not so sure about that, especially given the distain the general public has for this government at the moment.

        How many new VPN companies have started up in the last year? Possibly hundreds.

        The biggest torrent indexes of them all, TPB and KAT aren't going anywhere.

        Plus it's still crazy easy to find your fave torrent site on google.

        People who use it as their only way to get content, who have even go so far as to abandon free to air TV, are probably using RSS feeds anyway.

        Last edited 21/11/14 10:32 am

        The Asia Pacific region is more than Australia. It includes Malaysia, Thailand, Japan, Singapore, Korea, etc.
        Having watched my wife keeping up with the "soaps" via Youtube, I assure you the market for non-English material is significant. For all the shows and movies that don't turn up on Youtube, chances are the ONLY way you'll ever see them is via Bittorrent.

      The arrival of Netflix in Australia will not reduce the prevalence of unauthorised downloading and sharing in Australia as it doesn't address the root cause of the market failure, particularly given the strong likelihood of a limited library due to the existing distribution rights for content compared to a US subscription. It looks like in order to get coverage across most of the popular programs and movies, consumers will need to subscribe to multiple services. Furthermore streaming services still don't offer full off-line content, only work with a limited set of devices, are geo-blocked, and generally still overpriced in Australia.

      Bit-torrent and Usenet remain the only services that address consumer demand. Consumers want to watch what they want, when they want, where they want on any device they want in a timely, easy and convenient manner. Until a commercial service which offers the same flexibility is established, unauthorised distribution through bit-torrent and Usenet will retain its market share.

        Bit-torrent and Usenet remain the only services that address consumer demand. Consumers want to watch what they want, when they want, where they want on any device they want in a timely, easy and convenient manner.

        This is pretty much what Netflix is now (albeit with a somewhat limited library). With Netflix I have a wide choice of devices to watch on, where I can pick up a show/movie from exactly where I last left it, and get fantastic recommendations of content I would have otherwise been oblivious to.

        I choose to pay for Netflix not because it's a legal alternative to torrents, but because it is a better experience.

          I agree that Netflix is almost there, but it still lacks the convenience compared to downloading a DRM free file which you can play on anything off line. I have many devices which I can play an MP4 file on but will never get supported by Netflix.

          Last edited 21/11/14 8:59 pm

    I personally will pay for both under two different accounts. I am happy to support the Australian version fully understanding initially it probably wont be able to compete on content.

    My feeling is that if we don't support it early, it will not be a viable business model in Australia and they will never deliver the content we want. You have to support the businesses that are doing the right things for consumers.

    I was asked to agree to the T&Cs again recently, I wonder if this was so that they can come back to me once AU Netflix launches and say "hey, you agreed to these T&Cs, one of them is that you need to be a US resident to use our service, please transfer to the AU service".

    I'd rather have the Australian service, the VPN slows things down a bit and I'd like the simplicity of just having it work. But, TBH, I am pretty interested to see what Stan has to offer, it sounds like it could be a good option.

    If its anything like the difference between the US and UK netflixes, the Australian Netflix may offer a bit more variety of Australian shows (whatever they maybe...) In which case, most people would be either using their VPN or spoofer to continue switching between US, UK and Australian Netflix regions depending on whats on release.

    Either way, Netflix gets a subscription. Once the current TV contracts are over and Netflix can flood the market with enough content to match their US app, then we may see a major migration back to Australian accounts.

    I tend to use Netflix mostly for movies for myself, or TV shows for my daughter. At this point in time I'm not so bothered if certain TV shows are blocked for Aussie viewers.

    Should the price be right, I will probably continue using Netflix, even of certain shows are removed.

    I am hoping Netflix is talking to Aus ISPs regarding unmetering netflix traffic, that would make me think about migrating to an Aus account if Aus Netflix was unmetered with my ISP (iinet).

    It doesn't really bother me what they do. If they somehow "force" me to use the Aus version, I'll simply cancel, get my Arizona-based cousin to sign-up for the US version , get his login details and share the cost - just like I do with HBO Go. Basically, I'll do whatever's necessary to avoid what is likely to be a sub-standard, overpriced Australian offering - like most things tend to be here these days.

    Not sure about everyone else, but if the price between US and Aus is about the same, I will change my subscription to Aus, but keep using unblock us so I can get other regions.

    If we all change our subscription to the Aus one, they can take that to assholes like Fuxtel and say "haha. Look what we did. Suck it" even if most of the people are still using other regions.

    Only if it's about the same price.

    I have tried to join Netflix via VPN. Works OK until you get to the registration part where you need a US Credit Card. I even tried a US Credit Card that you can add money to when you need it. Netflix wont accept those cards now either. I was subscribed to Foxtel Play. Abysmal choice of packages. You get 13 rubbish channels for $25 a month. Everything else is extra. When I complained about the pricing structure compared to the new Foxtel residential package with over 40 channels for $25 they said they had reduced the other packages by a whopping $5.00. They seem to have no idea what is coming to the online streaming market.

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