After years of speculation and months of hype, Netflix will officially be available in Australia from this Tuesday -- and local pricing has finally been confirmed. One thing is evident even before it launches: Australian commercial TV networks are utterly panicked and have been scrambling to come up with a response.
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Almost the only thing we didn't know about Netflix locally before today was the pricing. That has now been confirmed by Netflix, and it's actually slightly lower than the widely predicted $9.99 basic price:
- The basic standard definition service is $8.99 a month.
- For $11.99 a month, you get HD streams (for shows that offer it) and can stream to up to two separate screens from the same account.
- For $14.99 a month, you get 4K and HD streams (for shows that offer it) and can stream to up to four separate screens.
That makes Netflix slightly cheaper than Stan and Quickflix ($9.99 a month) and considerably cheaper than Presto ($14.99 a month if you want both TV and movies)
Outside Netflix's own productions, we also don't know the exact range of content that will be on offer -- including what won't be available in Australia that isn't available in the US. But even that won't matter much, because all the information to date suggests that anyone who wants to pay for a VPN or use another region-spoofing approach will be able to continue switching between Netflix regions as the mood takes them.
We've already discussed how Netflix is a potential threat to pay TV: paying $10 a month to view entire series or movies at a time of your choice sounds a lot more appealing than paying $50 or more a month to watch it when it's broadcast. If you like sports, you still don't have much choice, but for most other purposes, Netflix and similar all-you-can-view subscription streaming services are much more appealing from a purely financial perspective. Cue panic in the Foxtel boardroom (and a push to make the existing Foxtel platform more appealing via the newly-launched IQ3).
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Netflix is also a threat to free-to-air TV. It offers a huge smorgasbord of choice at a time when TV networks are attracting smaller audiences than ever, as we enjoy the wider range of choices available outside broadcast TV.
In 2015, it's not uncommon for zero shows on free-to-air TV to attract more than a million viewers on a given night -- and many dramas do less than half that. That's really bad news if your business is built on selling advertising to a mass audience. TV might be the biggest viewing audience there is, but individual shows are less popular than they have ever been in the colour TV era.
Free TV does itself few favours in this department; it constantly screws around with schedules, shifts broadcasts on a whim, and fills its hours with repetitive and uninformative news programs and endlessly elongated reality shows. Quality drama is increasingly rare, and hard to justify because of the cost of production. And then along comes Netflix, which has a calling card of producing high-quality series like House Of Cards and Orange Is The New Black which can be viewed in entire seasons -- no more hanging around or trying to guess when a show will be on.
Netflix has made soothing noises about how it may produce an Australian "Original" or two, but the reality is that it will contribute to an existing trend of less Australian content being watched by Australians. From a cultural perspective, that sucks, but it was already happening without Netflix. Virtually every network outside the ABC has already given up on comedy, for instance.
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Certainly Netflix is not the only company trying to persuade Australians to spend a small monthly sum for access to a large TV and movie content library. But it's telling that with the exception of Quickflix, none of them launched until it became evident that Netflix was finally planning an Australian service. As long as that competition didn't exist, local TV networks preferred to spend their dwindling cash resources elsewhere. But with Netflix arriving, they had to try and put up a fight.
So we have seen Nine partner with Fairfax (which owns Lifehacker's publisher Allure Media) to create Stan, and Foxtel partner with Seven to create Presto. Ten is apparently too cash-strapped to partner with anyone, but frequent rumours suggest it may end up in a commercial union with Foxtel anyway.
Both services are hoping that a first-mover advantage and the ability to extensively promote on their existing media will help attract customers before Netflix arrives. Stan is also promising some exclusive content, though it is rather vague on timing.
Netflix, though, is already the dominant brand when it comes to this kind of service, the one we've all heard of. While anything's possible, it's hard to see anyone else overcoming it -- just as local alternatives to eBay have largely withered and died despite substantial backing. Netflix scoring partnerships to offer unmetered access rubs further salt into the wounds of local TV executives.
The fact Netflix has a long heritage in the US also gives it a practical advantage: it already has clients for numerous mobile devices and smart TVs right from launch. Stan and Presto simply don't have that breadth yet, and even Quickflix, which has been around much longer, doesn't have the same range of options (leaving aside that it keeps looking like it might run out of cash).
Netflix has rivals in the US too, but none are exactly replicating the models being tested in the Australian market. Amazon Prime also produces large amounts of original content, but a Prime subscription includes discounted delivery on physical goods from Amazon and other perks -- something TV networks can't readily replicate. TV streaming service Hulu also charges for access to TV back catalogue, but involves co-operation across most of the major networks, something that's clearly not happening in Australia. The sheer scale of the US audience also makes it viable for individual cable channels like HBO and TMC to produce shows like Game Of Thrones or The Walking Dead using revenues from a single pay TV channel -- that simply isn't going to happen in Australia.
Competition can be healthy. A future in which Netflix is the only service we're happy to pay for is not one that would be good news for Australian writers or actors or technicians. And the lesson of recent years is that our entertainment options increase, not decrease -- we'll probably be happy to watch a mixture of live and streaming as long as both are there. But making those sources of entertainment into a business is going to be harder than ever. No wonder everyone is panicking.