Foxtel has come out swinging after CHOICE released data suggesting Australian customers pay up to 400 per cent more than overseas viewers for some TV shows.
According to CHOICE, “Season 2 of the popular Netflix series Orange is the New Black currently costs Australians a minimum of $27.26 through Google Play, 219 per cent more than what US Netflix customers pay. Consumers will pay up to 431 per cent more to access the show through Foxtel.”
CHOICE says its price comparison data shows Australians are “paying staggeringly high premiums for repackaged content even when it is delivered online through streaming or on-demand services”.
‘The Australia tax’
The consumer group’s CEO Alan Kirkland says viewers are being hit with an ‘Australian tax’ to pay local middle men.
“Consumers are asking themselves why they have to pay a premium to Foxtel when they can access and pay a reasonable price for content through legitimate overseas services like Netflix. Despite what some local incumbents have said, accessing Netflix – which will spend $3bn this year paying for content from studios – is legal,” Mr Kirkland said in the CHOICE statement.
“The heart of this issue is about local middlemen wanting to clip the ticket on popular overseas content rather than respond to changing technology and deliver affordable content online.”
Choice ‘got it wrong’
Foxtel’s corporate affairs director Bruce Meagher hit back at the CHOICE, saying its content pricing and distribution models were off the mark.
“Leaving aside the obvious point that the producers of content should be entitled to determine how it is distributed and monetised, there are profound implications for the Australian media in this proposal,” Mr Meagher said in a media release.
“If free to air or subscription broadcasters were not able to aggregate the best international content to attract eyeballs for advertisers or subscription revenues we would not have the resources to invest in Australian content and the TV production sector would largely collapse.
“Last year Foxtel alone broadcast around 70,000 hours of first run Australian content.”
Mr Meagher said CHOICE also made “invalid” and nonsensical comparisons between products.
“To compare Foxtel’s service with that of Netflix in the US is nonsensical. Netflix is essentially a library service which, due to its success, has been able to commission a few high quality and popular dramas. So while it is true that consumers can get access to Orange is the New Black and House of Cards as part of their Netflix subscription that’s basically where the new content offering ends,” Mr Meagher continued.
But CHOICE’s argument also centred around series that had not yet made it to Australian TV, namely Steven Soderbergh’s new drama The Knick, starring Clive Owen, which it said was available in the US and Singapore but not locally.
The consumer groups claims came as the Government proposed an industry-regulated internet “filter” to stop illegal downloading.
CHOICE said competition issues needed to be addressed before a filter was introduced.