Choice targets disparities in cost of streaming content in Australia
A new analysis by consumer advocacy group Choice claims Australian customers are being forced to pay much high rates for overseas drama content even when it is delivered online through streaming or on-demand services.
The Choice analysis highlights popular US series such as Orange is the New Black and the Walking Dead as examples of where Australian consumers are paying dramatically more than their American or British counterparts, driving people to overcome geo-blocking and access US websites like Netflix and Hulu.
Choice graphic
“Australians wanting to watch the upcoming season of Walking Dead will be paying up to 376 per cent more than people watching the same show in the United Kingdom,” says Choice Chief Executive Alan Kirkland.
He also accused the government of being “influenced by the local cable industry to bring in laws that prop up out-dated technology and business models at the expense of cheaper internet streaming services”.
Season 2 of popular Netflix series Orange is the New Black currently costs Australians a minimum of $27.26 through Google Play, 219 per cent more than US Netflix customers pay, with iTunes costing 261 per cent more. It claims consumers will pay up to 431 per cent more to access the show through Foxtel’s streaming service Play, calculating the cost per month based on a consumer not already having the service.
The cost disparity is also blamed for driving piracy, with Australia having one of the highest rates of content piracy in the world.
This afternoon Foxtel has hit back at the claims by Choice saying it has made “invalid” comparisons. See the full statement at the foot of this article.
“Time and again we are seeing consumers hit with the ‘Australia Tax’ on digital content. It’s clear the business models forced on consumers by local intermediaries are subjecting Australians to artificially high prices for overseas content.”
“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.
“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.”
The debate comes on the same day future customers of pay-TV provider Foxtel’s planned broadband service are being warned it will take steps to ensure that its customers aren’t downloading copyright-infringing TV shows and films online.
The move comes amid ongoing debates about how to combat piracy, with the nation’s top teleco players calling on for advertisers to to ban advertising campaigns on websites that host pirated music and movies as part of a new offensive against provider. Earlier this year, Mumbrella revealed a number of major media agencies and clients were advertising on illegal hosting website Watchseries.lt.
Choice however, argues part of the problem is content owners are not making shows freely enough available and cites the new Steven Soderbergh drama “The Knick” which is currently showing in the USA and Singapore but has no announced date for an Australian premier.
“We are concerned that the government is being influenced by the local cable industry to bring in laws that prop up out-dated technology and business models at the expense of cheaper internet streaming services,” said Kirkland.
“Piracy is a problem in Australia but we expect the Government to look to the market first for a solution. Australians struggle to pay a fair price to watch what they want at the same time as the rest of the world. The internet has made affordable content possible but Australian providers are not delivering.”
Nic Christensen
Updated: Foxtel has this afternoon released a statement in which it says the comparisons made by Choice are “invalid”. Its statement in full:
“Choice have made invalid comparisons between completely different products to justify their claims,” said Bruce Meagher Group Director of Corporate Affairs at Foxtel.
“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.
“To acquire other new dramas US consumers have to sign up to different service providers, and given that drama lovers don’t just watch one show, this is what they inevitably do.
“As part of a Foxtel service consumers can get access to virtually every major new US drama produced, usually within hours of its American broadcast. They also get a huge range of UK dramas, Australian dramas especially commissioned by Foxtel, plus a host of other general entertainment, sport, documentary, news and kids programming.
“To acquire a similar cable or satellite subscription service in the US, consumers would pay a similar price and depending on the bundle structure offered by particular suppliers sometimes more,” Mr Meagher said.
“What’s more, given that Netflix doesn’t sell Orange is the New Black to other US broadcasters, they’d have to have Netflix on top of their cable account if they want to watch that show! They would almost certainly be paying more than Foxtel customers for the same service.
“Foxtel will become even more affordable when it introduces its new $25 entry level package on 3 November.
“Choice CEO Alan Kirkland claimed on ABC radio that Foxtel is protected by a regulatory regime that prevents competition; this is simply untrue. There are no regulations that protect Foxtel from competition and the speculation that Netflix will enter the Australian market shortly is stark evidence of that fact.
“Mr Kirkland objects to geographic licensing of content and claims that broadcasters like Foxtel are “local middle men wanting to clip the ticket.” 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.
“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.
“What Choice propose would result in a massive loss of Australian jobs and the diminution of Australian cultural life. Given the interdependence between sectors, it would also have a profoundly negative effect on Australia’s film industry.
“In addition, it would impact our ability to pay significant sports broadcasting licensing fees, seriously undermining Australia’s sporting codes.
“Finally, Choice regularly claims that Foxtel’s bundle model is outdated and a cause of many of the problems they say exist. We would simply make the observation that Choice itself operates a bundle model both through its magazine and online.
“Many Choice reports can only be viewed by subscribers and many others are available at a one off charge equal to almost three months’ subscription, if you ask for one over the phone, the kindly Choice staff member will advise you that you’d be better off buying a subscription!
“Choice know as well as we do that the best way to operate a successful content creating business is to aggregate content and sell it in bundles to customers,” Mr Meagher concluded.
Nevertheless, that does NOT explain why any online streaming content should be more costly in Australia than the US or UK. Fox is full of BS but has explained nothing. There are no extra costs involved. LIAR.
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And then there was this…
http://www.lifehacker.com.au/2.....ing-media/
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While Choice may be comparing apples, oranges and pears – Foxtel is trying to make an argument without numbers because the numbers still don’t add up for them.
If I want Foxtel and I want movies, sports, kids and general entertainment I need to pay $124/month for the premium package and that gets me 91 channels. I can pay 50USD/month to Comcast in the US and get over 140 channels including kids, sports and movies. There’s an apples for apples comparison.
As I don’t live in the US and I can’t afford Foxtel, I instead choose to combine Netflix and Hulu subscriptions (with a VPN service) which gets me access to current TV, historical TV and movies. Each subscription costs 8USD/month and a VPN will cost about $2/month (assuming you buy a year upfront). Total cost to me less than $20/month AUD (and less than Foxtel’s updated intro package at $25/month). Apples for apples Quickflix costs only $10/month but it’s got a very limited library and you pay an extra for premium items ($5.99 per movie or $2.99 episode).
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Foxtel would have a valid argument if they played the shows out at the same time as the US. It is very rare for them to fast track show – Orange is the New Black is currently more than half the series behind, Hell on Wheels similar. And you have to purchase higher than base packages to get these shows. They have been rumoured to be restructuring their prices due to the amount of people that have set up offshore/VPN netflicks accounts (some 250,000), but whether less than ridiculous prices will make them more popular than Red Foo in a Sydney pub is yet to be seen.
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Try adding up what it costs in Foxtel to get the range of what’s in Netflix. It is ridiculous. Plus you have to pay for a whole lot of setup.
Sure Netflix does not have everything. But it’s so much better value than Foxtel that there is no comparison. (Plus Netflix made House of Cards and Foxtel made…..)
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Pirate Bay (AUD)
$0.00
-100%
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Surely the issue is that apples cost 3x more in this country. As does everything else.
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It’s very simple, buy a Seebo, it does it all, it is a amazing entertainment hub at a one off payment, yes that’s right one off payment.
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This is why I pirate
This is why everyone who reads this needs to hit up KickAss Torrents
Get amongst it!
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Admittedly I work at Foxtel so am biased but I have to agree that it’s unfair to compare Netflix with Foxtel. Netflix is a great product but you can’t rely on it alone if you want all the new US content such as Game of Thrones, Girls, the Walking Dead or Mad Men. If it was a one stop shop for all content needs then the penetration of cable TV in the US wouldn’t still be sitting at 50%.
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Choice has incorrectly compared subscription services with Electronic Sell Thru (EST) ownership models iTunes, Google and other digital platforms offer. If they aimed to compare pricing correctly, they should have taken into account that subscription services such as Netflix and Foxtel only offer a streaming or linear service to their customers. To make a fairer comparison they should have compared the closest thing to EST ie. DVD pricing. They would have discovered that the DVD is way more expensive than EST, and episodes are offered day after the Australian broadcast on EST rather than at the end of the season (for The Walking Dead that is).
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…….Oh and to answer ‘Huh?’s’ question Foxtel has made/is making Wentworth, Devil’s Playground, Deadline Gallipoli, Grand Designs, River Cottage and Paddock to Plate.
Unfortunately most Australian’s won’t ever hear about this local content as they’ll be too busy trying to find out what the next ‘must watch’ US series will be.
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Felicity.. unfortunately most Australian’s won’t hear of those shows because most of us are priced out of the choice.
And as for your 50% cable figure… pretty sure Netflix doesn’t count as cable TV.. isn’t that in the name?
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Is the Netflix $8.56 for Orange Is The New Black for the series or per episode. I’m pretty sure that Foxtel is for the series in Foxtel Play and for all series in Boxed Set … plus you get shitloads more stuff for your $45.
If so it’s a bit like comparing the cost of one match compared to the cost of a box of matches.
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Everything is expensive in Australia – deal with it you numbnuts.
The price of apples, labour, manufacturing, fuel and even hookers!
Foxtel is doing a great job for the Australian economy making jobs and producing local content – and giving jobs to thousands of people. Yes, its expensive but the new pricing will be very competitive from Nov 3.
Netflix should be banned from entering Australia becuase of the negative impact on the economy or should be made more expensive. Anyhow, they dont have any thing to offer more than random TV shows + movies while Foxtel has the entire package – movies, sports, drama, lifestyle, entertainment, kids and music, blahblah….
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“Unfortunately most Australian’s won’t ever hear about this local content.”
Nope.
It’s the reverse. Australians are hearing about everything now they don’t have to rely on a rip-off local redistribution system for their information.
The obvious answer is get rid of the local redistribution system (Fox, Nine etc), but that’s occurring anyway as viewers vote with their eyeballs.
Once the AFL and co work out they don’t need Fox, Nine etc, that they can go direct to a global audience themselves, paying nothing to rip-off local redistributors, it’ll be game over.
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If we got rid of Fox and Nine then there would be no one to fund the local content referenced above.
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from the armchair………….pretty sure I wasn’t including Netflix as a cable provider (would kind of defeat the purpose of my point wouldn’t it).
Anyway, I’ll admit that it was an incorrect figure. Pay TV (satellite and cable) penetration is actually closer to 86%. Americans typically get Netflix on top of their cable, rather than instead of it.
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Netflix is around $8 a month. And super easy to get.
I like having Foxtel. Really dislike paying through the nose for it. Especially when new release is often 6 months behind the 8-ball.
Except for NRL. Which should be free. For everyone. Just like the AFL.
A service that charges a premium, sorry, super-premium price, who also serves more ads than most free to air TV channels should cost a hell of a lot less.
And the fact that Rupert’s newspapers have been so passionate to elect the party who’ve screwed up our NBN beyond repair makes me even less inclined to renew my subscription.
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