Similar pricing to that of the U.S.
Netflix’s pricing announcement might have come sooner than expected because of the Reddit forum leak, which indicated a similar pricing. The pricing structure is AU$8.99, AU$11.99 and AU$14.99, respectively, for standard definition streaming to a single screen, high definition to two screens and up to 4K quality across four different screens.
The respective pricing in the U.S. for the tiers is $7.99, $8.99 and $11.99 suggesting that the Australian pricing is more or less in line with that of the U.S. Going by the current Australian dollar to the US dollar exchange rate, the local pricing is slightly cheaper than the United States, according to a report from the CNET. New users will be offered one-month trial by Netflix.
The third season of Orange is the New Black, the original show from Netflix, will premiere in both the U.S. and Australia on the same date (June 12), and the other two seasons will be made available after the launch, according to an announcement by Netflix.
“Netflix will also be the exclusive premiere home for season three of the political drama, House of Cards,” the statement noted.
Cost advantage for Netflix
Netflix, which is not required to collect GST from Australian customers, enjoys a 10% cost advantage over rivals such as Stan, Presto and Perth-based Quickflix. For tax purposes, the U.S. company is not considered a “local entity” in Australia, and is this exempted from having to collect GST.
The Netflix pricing announcement follows a report from the Venture Consulting which notes that Australia can support only two major players in the streaming industry over the long-term. The report also mentioned that around 10% of Foxtel’s 250,000 customers are considering either downgrading or cancelling their subscriptions. However, Foxtel chief executive Richard Freudenstein disagreed with the report, saying that he is still expecting subscriber growth.