Now We Know Pricing, Australian TV Is Terrified By Netflix's Launch

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.

MORE: •These Are The Most Popular Movies Netflix Australia Is MissingHow To Access Netflix US Using Your Netflix Australia Account

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).

Picture: Getty Images

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.

Picture: Getty Images

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.

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Comments

    Anybody going to do a story on how our woefully inadequate Internet infrastructure is not going to support all these new business models? My internet has completely tanked in peak hour now...the isp's aren't interested in boosting their own infrastructure ahead of the nbn, so we are left with nothing that works.

    Do some testing on your connection before you start paying for a service that might not work...

    Last edited 23/03/15 7:49 am

      I would be interested if Netflix is opening a local CDN for Australia. Currently the closest CDN is in Los Angeles, which dramatically impacts our connection speed. Combined with our poor infrastructure it could be an issue for network performance and video quality. Any word @anguskidman ?

        Netflix has a program that places nodes within your providers infrastructure. Last I heard there are already nodes in place in some providers' networks.

        A link to the program I mentioned in another comment: https://openconnect.itp.netflix.com/

        As Tim Mentioned most of the Telco's will utilise the Open Connect Devices to help remove traffic having to traverse back to the US. You can almost guarantee that any of the Telco's that are offering UN-metered will already have these installed and waiting for traffic. Also, Netflix will also use some of the CDN providers in OZ which includes AWS with CDN POP's in Sydney and Melbourne

          Do these work to move content from US netflix or will they only carry Australian Netflix assigned content ?

      If they're streaming from local servers (which I gather they are), and if a significant number of people switch from VPN to native (local) connections, this may actually improve performance.

      Bandwidth to a local peering hub is MUCH cheaper than via the USA. The fact that many ISPs are excluding Netflix from their caps strongly suggests some form of peering arrangement is in place.

      That said, Netflix is something like 40% of TOTAL Internet bandwidth in the US, so if they haven't planned accordingly you may be right. And it's not as if our ISPs have a history of planning for the future. I'm guessing that Netflix performance is going to be poor initially due to insufficient bandwidth to Netflix's hub, but paradoxically general performance may actually improve.

        Netflix is something like 40% of TOTAL Internet bandwidth in the US

        Does this mean Netflix is now more popular than porn in the US?

          Nah, just that the average time spent waching Netflix is 4 hours a day, and the average time spent watching porn is 4 minutes.

            You need to take more vitamins. give you wrist more staying power.

      Plenty have been using Netflix from au with VPN for years ..I don't hear my friends complaining about how they can't stream movies on adsl2 cable and nbn. Now Netflix is offering the service out here.. Good on em don't have to VPN or proxy change anymore . well worth it now.

        So you and your friends are among the 15% of Australians with ADSL2?
        Good for you.
        The rest of us are dealing with Satelite and Basic.

        I agree! I've been using http://www.getflix.com.au/ to unblock the American version of Netflix for about 10 months now - and it works just fine... I also use it to watch HULU - which I personally prefer anyway. Plus I travel overseas A LOT for work and all I have to do is change a few settings when I get to my destination and all is good again. I'm not much of a 'Tech head' so I cant tell you exactly how it works but all I know its very easy to use :)

    3 pricing tiers. Interesting.

    I'm going to look at my USA contract, specifically to check how many concurrent streams I can run.

    I signed up just before the U.S. price changes from US$7.99 to 8.99 (I think) capped for two years. When HD was not an extra. With the Aus$ weakening I'm paying between AU$11 to $12. The Aus price looked good until I saw the 3 pricing levels. I wonder what else is different?

    Why a different billing for us Aussies I wonder?

    Though I'll still be keeping my VPN. The Canadian & South American Netflixs have much better content then the US. I imagine Australia will be similar.

    Last edited 23/03/15 7:55 am

      I believe that Netflix US has the same pricing tiers (albeit cheaper) so Netflix AUS will be the same there. The content will be the deciding factor though. Bring on tomorrow!

        I didn't think Netflix USA had any tiers at all unless you wanted to add in physical DVD mailing. If they even still do that.

          Digging around the web it looks like they have a $7.99 SD plan and a $8.99 HD plan, there is talk of the third tier but can only find that on www.netflixreview.com

          The US has the same pricing tiers we do.

          It's exactly the same, no different. Only the price is slightly different, which is great considering the exchange rate.

          Last edited 23/03/15 2:21 pm

    Im looking forward to seeing an analysis of piracy a few months after Netflix launches.
    I would suspect that it will have a decrease since a quality, cheap streaming service is now available.

      Yes, this would be interesting to see. However, I can imagine that if there is a decrease in 'piracy' activity Mr Brandis will be out there banging his drum of how the govt's anti-piracy policy has successfully scared away all the offenders.

      Its not as if Netflix has current shows like GoT or The Walking Dead. Its a back catalogue service.
      You also have to wait a while for new movies to show up on it.
      Piracy of those aforementioned shows will continue as per normal.

        Spot on!

        It's not going to change much for those types of shows - which also happen to be the most popular. Will do wonders for casual piracy of old catalog stuff.

      Not by much as most Aussies won't have enough bandwidth to reliably stream HD video

        I subbed to NF and speedtested at 4.5mbps download last night.

        Got the 2 Device HD Plan and NF delivered. Was able to watch House and Tron Legacy with no buffering. Streamed like a trooper.

    Time for an aussie streaming comparison article im guessin!

      I want to know how much content is missing on these services. I signed upto Stan. And already have cancelled.

      I started to put a spreadsheet together to see how much was missing. It did not look good for stan but i would love for people to add to this sheet info on other shows and other service providers. Just to see how bad they are.

      https://docs.google.com/spreadsheets/d/1uNULszVQgyiHERkPRHz4PvEAFbBFiuMM8kcILvVw3VQ/edit?usp=sharing

      So if people could add to the sheet and lets see how crap the content is or will they come up showing alot of content.

    This is my whole problem with these streaming services, I can't preload the show/movie I want to watch, we hire movies through iTunes or the Playstation Store, but I choose the items we want to watch and download it a few days or hours before we want to watch it on Saturday night, we tried the streaming option but gave up simply because of the constant stops and starts because of Internet that had bogged down to an absolute crawl. The NBN is on it's way for our suburb (about 6 to 12 months away supposedly) but in the meantime, unless I can buffer at least half of the show/movie we want to watch, then streaming for us for now is a non option.

    Last edited 23/03/15 8:55 am

      Exact same position here and it's super frustrating. I can pull up the concrete cover next to my letter box and see the beautiful fibre running past but the last few metres to my house haven't been installed yet.

      Give the 1 month trial of netflix a go. I think you'll be impressed with it's streaming service.

      Netflix is pretty good at adjusting video for low-bandwidth connections. I've seen it livestream just fine where an appletv required preloading most of the show.

      im on ADSL1!!!! yes 1 not 2 or 2+ ... i use netflix from usa via getflix redirection and it streams great via my ps4 onto a reasonable sized tv (i think 46") sure it aint no 4k or 1080p but its as good a picture that i need. the way it works is it will preload the first 10 mins or so in a lower quality to get you started, as it goes it improves the quality until the quality its pre-loading time matches the watching time.

      i very rarely get a stutter.

    I don't understand why media companies in Australia don't use a point of difference to compete. i.e. If you are fairfax + channel 9 then bundle TV with a newspaper subscription and make sure nine news is available on the streaming service. Not sure why none of them partnered with the ABC either - they have the most appealing Australian content

    Now if only there was a website comparing the popular tv programs showing which streaming service you need for it...

    From those that don't know Netflix is apparently available in NZ from tomorrow, at $9.99, $12.99 and $15.99 in comparison (and not charging GST). Not sure how many will pick it up over here as most people are ditching Sky and using alternatives, especially for sports.

    Doesn't it bother anyone that while we know the prices we don't know what we paying for?
    Outside Netflix’s own productions, we also don't know the exact range of content that will be on offer...

      Well you're not paying for anything yet. Once the service is active in Australia, you'll have the opportunity to consider the service before signing up.

      Actually - We do know the content. All programming was leaked on Reddit 2 days ago.
      This is just the initial offering, the library grows weekly. http://imgur.com/a/wz74R

    The future for free to air TV is in reality TV, sport and news.

    Free to Air TV wants the content that people need to see either live or the minute it's on TV (or at best a day or two after). After that it becomes irrelevant as all your friends who are talking about have already moved on to the next event, the next game or the next reality episode.

    News, Reality and Sport are the 3 things that netflix will never be able to compete with (and won't want to).

    With respect to the author, I disagree that paying $10 a month for watching any season of a TV show is better than paying $50 a month for pay TV.

    The simple reality is that it will be 2-3 years before a season that is airing on pay tv now shows up on Netflix.

    The idea that every new episode of Home and Away will be on Presto and every new episode of The Hot Seat (or whatever show 9 has that has airs daily - or even weekly) will end up on Stan just hasn't come to fruition and we aren't going to see Neighbours uploaded to netflix anytime soon, should 10 decide to join them.

    Stan made a big announcement about the CSI franchise and about MTV shows like 16 & Pregnant, then you access the service and find it's only a 2 or 3 old seasons - about 2 years behind the current viewing and not every season is available anyway.

    Make no mistake, the FTA network that is doing well for itself (7) is not "scared" at all - they just see Presto as a bit of an experiment with foxtel and a way to possibly make more money on old content they have the license to.

    The one network that should be scared, 10 who is in a financial hole at the minute, isn't that concerned at all. They have said in the media that news, sport and reality will save them and they are exactly right.

    Last edited 23/03/15 12:42 pm

      The simple reality is that it will be 2-3 years before a season that is airing on pay tv now shows up on Netflix.

      Not true - In the last series of Breaking Bad the latest episode was available on UK Netflix the day after in aired in the US.

      Cash is king, as is content. Netflix have large war chest to either acquire or produce content. FTA relies on outdated data to track viewers. I've never seen anyone with a Nielson box in their home. Netflix knows exactly want content is being viewed by each user and uses that data to improve the experience. Which is why they can take risks when rebooting content that FTA has discarded ie Arrested Development.

      Sport is going to be interesting, all the US Sports have digital channels direct from the Sport's themselves. Cricket Australia now has a app on the Apple TV. If I was the AFl or NRL in the next round of Broadcast Rights i'd look to separate the Digital Content and partner with a Netflix type

        just to add to this. netflix uk has Better call saul the very next day!

          Better call saul in Australia is owned by 9/Fairfax who are showing it on Stan as the only place in Australia where you can watch it.

            Correction, the only place in Australia you can legitimately watch it.

              LOL well yes I guess that's true of everything.

        and is breaking bad on free to air TV in the UK?

        There's your reason.

      The simple reality is that it will be 2-3 years before a season that is airing on pay tv now shows up on Netflix.

      This is categorically false. Netflix has AMC, and is also folding in Showtime and Starz into their catalogue. The one big cable company with significant original programming, HBO, doesn't, because they want to promote HBO Go. The reason Better Call Saul isn't on Netflix here, is because of a licensing deal with Stan, but that's not 'pay tv' either.

    Well Presto is owned by Foxtel anyway! So they won't be worried.

    I can see people blowing apart their usage plans trying to stream 4K TV Shows or movies on their new TV, and not realising it counts towards data.

    If Foxtel Go can drill 1.3GB an hour, and that's standard definition, I would not be suprised if 4K is chewing something crazy like 4GB an hour.

      Foxtel go is using outdated technology for the streaming, which is why it uses so much data.

      Netflix uses 700mb per hour for SD, 3Gb per hour for HD and 7Gb per hour for Ultra HD 4K
      https://help.netflix.com/en/node/87

    How about an ultra useful comparison of these streaming services? Something like the music comparison would be great!

    The simple reality is that it will be 2-3 years before a season that is airing on pay tv now shows up on Netflix.Is it, though? There are several shows being "fast tracked" through Stan, not the least of which is Better Call Saul. Netflix makes several of it's own programs that are on Foxtel but will go directly to Netflix as well, such as the upcoming season of Orange is the New Black.

    It is disappointing that Stan only has some older seasons of TV shows rather than all of them or the most current one, but I assume those later seasons will be added in due course. The service has only been going for a month, so I'll cut them some slack while I watch every single episode of Star Trek.

    Is every show going to be available via streaming services as oposed to paying Foxtel for the most current service? Not yet, but soon. Plenty of people in the US have decided that cutting the cable is the best choice for them, and I am confident Australia will follow, eventually. I personally got rid of Foxtel years ago when I realised I'd be better off just buying the DVDs for the shows and movies I want to watch, which I can watch at my convenience instead of waiting for them to come up and take up the limited hard drive space in the iQ unit. That said, my primary hobby is gaming, and if I wasn't mainly using my TV to game I might consume more TV passively and therefore need a TV signal that doesn't look and sound like someone making a gravel milkshake.

    Local networks should be scared... Commercial free to air tv is mostly pathetic. Satellite and online services are way to expensive, typically double the price of similar services overseas (Quickflix was outrageously charging $8 per movie at one stage). Now, if only there was a Netflix type service which shows international cycling, football, tennis and golf 24/7, I could cut my tv viewing bills from over $100 to less than $30 per month, can't wait...

    It amuses me to see Foxtel squirm in the face of actual competition. They were happy charging families $50 a month for cable for decades. Even their initial $20/mo Presto subscription was a tone-deaf boardroom fantasy. I'm tossing up between Netflix and Stan but regardless of which one we wind up getting, I hope we get even more competition to make Foxtel sweat.

    Virtually every network outside the ABC has already given up on comedy, for instance.

    I disagree on this point. Most of the best recent single camera American comedies like The Office or Parks and Rec, or even conventionally-scripted sitcoms like 30 Rock came from NBC. Most of these have ended or about to, but these were their highest-rated shows and NBC is doubling down on comedies with things like Mr. Robinson for 2015. ABC's comedy schedule is essentially propped up by Modern Family.

    Does anyone know of any lists of the TV shows and movies delivered by the different services? Everything else is fairly similar, so content will be king.

    I want to use it for my own comparison, plus I'm putting together a comparison website: http://www.compareozstreaming.com

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