A 20% Netflix Price Hike Is Coming For Some Users

After months of rumours and "tests", Netflix is officially jacking up its prices in Australia. From next month, existing customers will need to pay up to 20 per cent extra for the service. (The price increase kicks in from today for new sign ups.)

This is significantly more than the government-imposed GST "Netflix tax" of 10 per cent. Our take? We're basically getting shafted, and the new tax is being used as an excuse.

From July 1 2017, the Federal Government will apply the Goods and Services Tax (GST) to all digital products and services supplied into Australia. Ever since the bill was passed, we've been waiting for digital service providers to announce pricing changes that pass the tax onto consumers. Netflix is the first company out of the gate, and it's a bigger price hike than we were expecting.

From July 1, customers on the entry-level $8.99 plan will need to pay $9.99 per month. $11.99 plan members will need to pay $13.99. The premium $14.99 plan will rise to $17.99. That's $1, $2 and $3 extra per month, respectively - or a difference of up to 20 per cent.

That means premium customers will now be paying $36 extra per year. This is a significant increase and well above the 10 percent GST applied to digital products from July 1. Nevertheless, that's precisely what Netflix is blaming the price hike on. Here's the official statement from the company:

"In light of the upcoming GST increase, we will be rolling out updated plans and pricing starting June 28 in Australia. Members will be notified of the changes via email and service notifications."

Netflix has attempted to justify the additional increase with the promise of more "exclusive TV shows and movies" and improvements to the service. But let's be honest - we would have been getting these anyway.

It's difficult to view this as anything other than a blatant cash grab hidden behind a new tax. The timing is sneaky and we don't like it.

Meanwhile, Foxtel Now has lowered its entry-level pricing to $10 - and unlike Netflix's cheapest tier, this includes 720p HD. Despite a range of improvements to the service, including offline viewing, Stan pricing remains unchanged at $10 per month.

If you don't want to pay 20 per cent more for a digital service so that the provider can cover a 10 per cent tax, we suggest switching to one of Netflix's competitors. Money talks.

The 'Netflix Tax' Explained

From July 1 2017, the Federal Government wants to apply the Goods and Services Tax (GST) to all digital products and services supplied into Australia. In practice, this means the amount of money you spend on software downloads and streaming services is set to increase across the board.

Here's everything you need to know about the so called "Netflix Tax" and how it will affect your wallet.

Read more

WATCH MORE: Tech & Finance News

Comments

    Or you know you could do 2 minutes of actual researching...

    The Premium american subscription is $11.99.... which is by today's conversion... $15.80..

    Add GST onto that and you've got $17.30AU.... so yeah, now being $17.99 may feel like a bit of a hike, but you know, it's pretty on-par with what the states.

    So no we aren't getting shafted.

      Is US Netflix an identical service with an identical library? You're comparing apples with oranges.

        No they are not identical services... But to call them two completely different fruits is a bit off. Maybe two different types of apples would be a better comparison, considering they are technically both the same family, just a bit of a different flavour.

        Last edited 28/06/17 11:24 am

          Okay, they are two different types of apples - one of which is significantly smaller than the other and should therefore be cheaper. :-)

          So, it is acceptable that we are paying the same for 200gram bag of apples, as the US is for 1.5kg bag of apples?

          "So no we aren't getting shafted" ???

            Yeah but their 1.5kg bag of apples costs them more of their average monthly income than Australians... But that's a whole other bag of oranges.

            Last edited 29/06/17 11:17 am

      As Chris says, content in our Netflix is abysmal. The only reason I'm paying right now is in anticipation of GOT, then I'm out again.

    You may want to double check the prices for Stan. The $10 tier is SD only, $12 for HD and $15 for the 4K tier.
    There was an offer for existing members to upgrade to 4K but I think it's only for a limited time.

      Haha they have tiers now? Their whole shtick at the beginning was 10 bucks that's it.

    A prime example of the Netflix tax, by Netflix themselves... if we have to adjust prices due to a tax, do we lower our component to be fairer to our customers? or use the mandatory price change as an opportunity to also increase our prices?

    My concern is other overseas purchases that have the infamous "Australia Tax" where overseas goods on particular services is inflated over and above import, hosting, currency conversion. My eye is on Valve, Origin, Adobe, Apple and Amazon... Valve is probably the worse offender cause they still sell to Australian customers in USD amounts without currency conversion or informing publishers they entered the wrong dollar amount for our region.

      Steam will be a bloody nightmare with this.

    If the Government were so intent on applying GST in this manner they should've gone the extra mile in also addressing long standing issues regarding a tendency for consumers to already be screwed over. We're still being screwed over on digital releases even when there is no justifiable reason for it, in contrast with other countries. IMO this will only make things worse.

      What can the government do? The called Adobe in they basically said "We charge this price because we can and people pay it".

    Who honestly actually buys games from local retailers or through the official online stores like steam these day... CD KEY vendors are the way to go and I doubt very much that they will give to ships about GST.

    Just checked my Middle tier US subscription on my Visa - With currency conversion charges - 13.48 - So I'll be 50c in front and still with a bigger library

    The only problem is this new tax has been suspended until 2018...

    This bill was passed by the Australian Parliament but then quickly amended under Treasury Laws Amendment (GST Low Value Goods) Bill 2017. As a result, Parliament has delayed the enactment of GST on intangible supplies by one year until July 1, 2018.

    Hmmmm... anyone fancy a tea party?
    We'll have to make-do with holding it in Sydney, as Canberra's landlocked, but it should do...

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