Ask LH: Is Netflix About To Jack Up Its Pricing In Australia?

Dear Lifehacker, I recently read that Netflix is planning to increase its prices in the USA this year. Does this mean Australia will be getting a price hike too? In my opinion $8.99 a month is the definite sweet spot; any more and I'd need to reconsider piracy. Thanks, Paying Enough Already

Dear PEA,

For the uninitiated, Netflix has announced it will be increasing its entry-level pricing to $US9.99 per month for all US customers starting in May. In a quarterly letter to shareholders, Netflix explained the reasoning behind the price hike:

"With respect to un­grandfathering, currently, more than half of our US members pay only $7.99 or $8.99 for our $9.99 HD 2­screen plan. We will phase out this grandfathering gradually over the remainder of 2016, with our longest­ tenured members getting the longest benefit."

So how does this affect Australian users? The answer is it doesn't; at least, not for the time being. Even if you've managed to connect to the US library with a working VPN, you'll continue to be charged Australian pricing (provided you originally signed up to the service locally.)

There are a few reasons why we don't think Netflix will increase its Aussie pricing any time soon. The service is currently the industry leader in Australia, with a market share that eclipses Stan, Quickflix and even Foxtel. A big part of this success comes down to attractive pricing.

At $8.99 per month, the standard package is currently the cheapest in the country; albeit by a single dollar. (Stan, Quickflix and Presto all hover around the $10 mark.) This doesn't leave Netflix with much room to maneuver if it wants to retain the title of "most affordable streaming service in Australia".

Plus, a price-hike this early in the service's lifespan would be seen as a cynical move by many — and bad publicity is something Netflix really doesn't need at the moment. As it looks to increase and solidify its market dominance, the last thing Netflix will want to do is piss off existing customers.

The whole "pricing parity" argument doesn't hold water either when you consider how much more content US customers get. Frankly, we should be paying less in Australia.

Instead of increasing its pricing, we think it's more likely that Netflix will attempt to incentivise users to upgrade to its HD and 4K offerings which run for $11.99 ad $14.99 a month, respectively. We've contacted Netflix for comment and will update the article as soon as we hear back.

With all that said, it's a pretty safe bet that Netflix will "revise" its monthly pricing in Australia at some point in the future. Nothing stays the same price forever, including fixed subscription services. The only question is when this inevitability will eventuate. Personally, we think we have a good year or so to go.

Cheers Lifehacker

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    Ah damn, I'm grandfathered on a $7.99 plan. Might have to let it expire and switch to AU 4k plan.

    I pay $11.99USD for four profiles, which works out at approx $16.50AUD. I am more than happy to pay this much for all the great content I get. It's the only time I've ever felt undercharged by a business. I don't currently ask the other three people to pay me for their 'share' but if it went up by enough I probably would.

    For those who don't know, TV channel 9 owns 50% of Stan and TV channel 7 owns 50% of Presto.

    I would honestly pay foxtel prices say 40-50 a month if they stopped blocking VPN's. Straight up. I'm sure others would too! And I'm going to call it now. the prices of netflix AU WILL increase within a year

      Nah, we are too small for it be worth the backlash.

      Traditional TV and Foxtel is dying and will die soon unless they they innovate like streaming services such as Netflix.

      People are very busy these days and quite often don't even get the chance to watch their favorite content because either their TV series, movies or documentaries air when they are busy with more important things that need to be done whether it be night or day.

      Catch up TV is great but not so great with the short time limitation to the availability.

      Streaming services such as Netflix, Stan and Presto are the real winners because people can choose what they want to watch and when they want to watch it.

      The other things that makes steaming services winners is producing good quality original content rather than just having only acquired content that is original to other TV networks.

      Netflix is investing 5 billion into original content this year and another 6 billion for 2017.

      Agreed, I'd happily pay up to the $50 mark without any issue (as long as I can access US content).

      Last edited 20/04/16 4:34 pm

    Perhaps a more pertinent question would be what do I get for a price rise? The same old content or a library which contains more/up to date titles

      I think maybe Netflix has a real opportunity here...
      Create some other plans than just the regular ones. Some ideas could be:
      - A plan that gives you access to only the netflix produced content for a lower price (ie some people might already have other streaming services or foxtel and only want to watch daredevil ,etc)
      - A country specific plan, one that let's you access a particular countries content (at a higher price of course, this higher price would stop the licence holders winging about rights in other countries ,etc as they'd get a cut)

      That's all I can think of at the moment, maybe you guys can come up with some other good plan ideas.

    So what if Netflix increases the subscription cost, too many people want what they want for the price THEY themselves want to pay.
    All commodities increase in price as time goes by, and I bet the whingers of the world (some here) would cry blood if their income was set in concrete at the meagre pay they recieved in their first job.
    I would pay double the current fee for the service which Netflix offer compared to other entertainment costs.
    Example :- Try bartering with the amount you want to pay in a supermarket or fuel outlet for their products, you would be laughed at, just like now, pay the price for a worthy hire you Scrooge McDucks.

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