Australian customers are irate with global streaming service Netflix, after it confirmed a significant price hike for local subscriptions.
As of Wednesday, Netflix increased the price of its three service tiers – basic, standard and premium – by up to 20 per cent, ahead of the “Netflix tax” implementation on July 1.
But while the new digital content tax applies 10 per cent GST to overseas videos, games and apps, Netflix has slipped in a price rise of its own – pocketing a further 10 per cent from Australian users.
Australia’s basic Netflix plan has risen $1 to $9.99 per month, the standard two-user service increased by $2 to $13.99 and the premium plan surged $3 to $17.99.
New subscribers will be charged the increased fees immediately while existing customers will have a 30-day grace period.
A Netflix spokesperson told The New Daily the price rise was to improve the overall product and deal with the upcoming tax change.
“From time to time, Netflix plans and pricing are adjusted as we add more exclusive TV shows and movies, introduce new product features and improve the overall Netflix experience to help members find something great to watch even faster,” a spokesperson in a statement.
“We also adjust plans and pricing to respond to local market changes, such as tax or regulatory changes. Since launching in Australia in 2015, we have not changed pricing. In light of the upcoming GST increase, we will be rolling out updated plans and pricing starting June 28 in Australia.”
But according to angry customers they are being forced to pay more for a sub-par service.
Dear Netflix there better be a huge increase in content with the 20% price increase
— Tamara gunther (@AmaratTamara) June 28, 2017
Monthly cost of a standard Netflix package will now be (in AUD) – UK: 12.65, US: 13.16, AUS: 13.99. Highest price for worst content, yay !
— Darren Cotterill (@dcotterill) June 28, 2017
— Melissa Garrett (@Xenutia) June 28, 2017
— Shaun Robinson (@ShaunP_R) June 28, 2017
Consumer advocate group CHOICE said that Netflix’s price hike was a “risky strategy”.
US Netflix viewers pay $US7.99 ($A10.50) for the entry-level service and receive a considerably larger and more up-to-date library than their Australian counterparts.
“Netflix’s Australian catalogue is nowhere near the US catalogue in terms of the depth of content you get to watch so moving prices will not go down well with many consumers,” CHOICE spokesperson Tom Godfrey told The New Daily.
“I think it’s quite a risky strategy to increase prices at the moment because you’ve got Stan competing really hard, you’ve got Foxtel’s new offering [Foxtel Now], and you’ve also got Amazon Prime starting to aggressively come into the market.
“This could very well be a misstep from Netflix.”
Mr Godfrey suggested Australians should look elsewhere for their streaming needs.
“I think this market works most effectively when you move your money according to the content you want to watch,” he said.
“Don’t fall into the trap of just putting Netflix on direct debit, now that they are increasing prices it’s a call to arms and a signal that you do need to seek out a more competitive offer from a rival provider.
“There are some great alternatives to Netflix and move your money around. If Netflix wants to charge you a lot more I think it should be a pretty clear signal that it’s time to see what else is available.”