Netflix says it can’t do anything about Aussies accessing US site, while being coy on GST issue
Netflix has claimed it is powerless to move the hundreds of thousands of Australians who are currently using virtual private networks (VPNs) to access the American library of the streaming service across to their newly launched Australian library.
In an interview with Sky News Business Reed Hastings, CEO of Netflix, acknowledged that the US streaming giant could enforce rules around only using American credit cards on the US version of the site but argued that consumers would just find other work arounds.
“You can pay with anything, you can pay with a gift card, you can pay with Paypal, so there is no effective block around payment method that works,” said Hastings, when challenged by host Helen Dalley about why the US video streaming giant refused to do more to combat the 200,000-300,000 Australians who use VPNs to circumvent geo-blocks which are designed to enforce existing local licence agreements.
“We’re really just focused on bringing the content together so its a great library here, and its a great library in every country, that’s the main thing we can do.
“What we are really trying to do is to have a great service in Australia so there is no reason to go to the complexity and cost of a VPN. By having a great service in Australia there won’t be people who feel there is a need to go to a VPN.”
Amid a blaze of media and the formal launch of Netflix’s Australian marketing campaign the company has moved to hose down concerns about its decision not to employ any local staff, questions about the creation of local content and concerns about it refusal to pay the goods and services tax – giving it a competitive costs advantage on local competitors Stan and Presto.
On the GST issue Hastings was coy, following recent comments by senior members of the government that Netflix should be charging consumers and paying tax, saying only: “Every nation is trying to figure out how do they want to tax their citizens when their citizens buy global good and we follow the laws in every nation.”
While on the issue of how many Australian jobs would be generated by the launch Hastings responded: “We are all out of California we don’t have employees around the world.”
Earlier in the week assistant treasurer Josh Frydenberg said he was concerns about rules which allowed Netflix a $US20 billion US corporation with hundreds of thousands of Australian customers not to be considered for tax purposes a “local entity” in Australia.
Australia is due to release a white paper on tax laws next week which is expected to recommend tightening up loopholes in that area.
Netflix has moved to address these concerns by highlighting how they are creating local content in Australia, citing its production of Mako Mermaids, which is produced by Netflix but refusing to be drawn on whether they would commission any more programming.
“H2O is great show for teenagers,” Hastings told Dalley. “That is Mako Mermaids is now in its second season produced in Australia and available to a global audience.”
“We are searching the globe to find the best stories that we can and to get them produced anywhere that we can. We are wide open to that, but there are no announcements today.”
The statements came on the same day that Screen Producers Australia welcomed the arrival of Netflix but urged them also to invest in Australia’s production industry.
“We are pleased to see a new player like Netflix enter our expanding market and we trust that this will not just provide an avenue for imported content and local catalogue titles, but also will result in a valuable contribution to Australian screens through original local production,” said Matthew Deaner, CEO of Screen Producers Australia.
Screen Australia and Fremantle Media have also created a new grant program to give producers more resources to pitch show ideas to services like Netflix.
Hastings also spoke about the importance of internet service providers providing unmetered access for video streaming, meaning users did not breach their data caps.
The Netflix CEO cited the Canadian experience as an example of what may occur in Australia: “Many countries like Canada used to have low internet caps – like 20GB – and as the Netflix grew they just expanded their caps and if you think about here in Australia over the last seven years they have risen significantly and eventually there just won’t be any data capping.”
On the broader piracy issue Hastings said he believed the Australian launch of Netflix would help combat piracy in Australia, which is among the highest in the world.
“What we have found with piracy is that if you have a legal and affordable service that is very convenient, some people – young people – might pirate, but for the most part people are honest and they would like to pay for the service and have it be legitimate,: he added.
Watch Hastings’s full interview with Sky News Business here.
Nic Christensen
Fun Fact
If you log into the Aussie Netflix using a VPN you can still get the US catalog.
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Have anyone ever confirmed that 200-300,000 number? I doubt it, because it’s totally untrue. But then never let the truth get in the way of a good svod story.
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@Hank Steakfist: exactly, this article focuses on only half the story. I’m a former US account holder who has just changed to an AU account for not much other than “neatness” (can use my preferred credit card for payment, and no longer have to set up separate overseas Nintendo, Sony and Apple IDs to download the Netflix app on my respective devices), but have retained VPN capability for the content flexibiity.
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People will still use VPN’s until the content is the same in all countries, and I suspect they will play around with the country the IP address shows they are from to access various countries to see which content they want. I definitely will anyways…I already do in fact.
And the thing is – its perfectly legal! I am still paying, I am not stealing. And surely that’s the main point isn’t it?
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So where is Aussie’s Google tax?
http://m.bbc.com/news/business-31942639
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There really isn’t much Netflix can do. We live in a time where someone with very little technical expertise can spin up their own VPN service anywhere in the world, with a couple of mouse clicks. A couple more, and they can change its IP to another block entirely.
What could Netflix do? More importantly, why should they do it?
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The fact is that Netflix runs two alternate subscription bases worldwide, one in the local territory and another via VPNs. People all over the world and not just Australia are using the VPNs and this suits Netflix. And again Netflix Australia is a foreign registered company with a domicile I think in Ireland. So it is really just another tax evader, no GST, no corporate taxes. If it got 300,000 subscribers that is $27million/annum in GST the Federal government doesn’t receive And unlike free to air and PAYTV it has no Australian content obligations whatsoever. The Producer Association is piss weak in welcoming them. It should be berating them as a rogue operator with little intention to contribute to the local industry.
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Mmm… Perhaps Netflix could put some of that GST they don’t have to pay into a grants and funding pot to develop Aust writers. Screen Aust and Freemantle doing but Netflix could do as good will.
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I dont understand why articles like this skirt around the real issue.
Netflix dont care who/what/where someone accesses their content from, as long as they pay for it.
The truth is, Netflix ONLY geoblock their content to appease the content owners and their backward regional based approach to content rights.
If they could let everyone have full access to their libraries tomorrow, they would.
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Dole bludgers, single mothers on welfare and Netflix are the ones responsible for Australia’s fiscal challenges.
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Anyone talking jobs or tax as an argument may as well stand alongside King Kunut and try and help him hold back the tide. The fact of the matter is, Netflix has the model. And it’s a global one. End of story. Anyone still paddling around in the regionally based, rights managed world is about to drown. Same goes for any CEO or MD whining about tighter legislation around content. You’ve already lost mate. Legislation is not a business model and anyone clinging to it ain’t going to last long either. Local content providers (Foxtel et al) have enjoyed a boon of overpriced, average quality stuff for a decade plus. And they saw the threat coming at least five years ago, but ostensibly did nothing because times were good and they were making shed loads of money for old rope. Time’s up. People now have options, legal ones, and the time you had to meet that threat has long since past.
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Netflix should pay GST and Income Tax to Australia – otherwise this $20 billion multinational corporation will syphon huge taxpayer funds out of Australia which are much needed to provide our citizens with health, education, infrastructure…and an $35 billion NBN (which will greatly increase Netflix’s profits – at great cost to the taxpayer – no cost to Netflix) – why should Aussie taxpayers pay for Netflix’s greed?
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Not entirely true…they could stop accepting Aussie credit cards. It would be very easy to implement. Yes that could be circumvented by some well connected people, but Anti Money Laundering rules would make it difficult.
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I will probably get stan , netflix or both.the main reason I’ve pirated is so I can watch TV shows on iPad when I’m out in the middle of nowhere ( half the time) with no internet connection. Can I record shows off stan,netflix to watch later? It’s all about the binge for me
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Global companies like Google, Apple and now Netflix have put chains around the ATO and the Govt’s FTA’s have added the padlocks. The ATO’s lock-picking allowance has also been cut. To find out who will be making up the taxation shortfall, look in the mirror. Google, Apple et al are no longer tax-collectors.
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The more people that use VPN’s to bypass geo-blocking will only increase Netfix’s argument for Global Licensing deals.
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I don’t understand why they don’t just launch Netflix GLOBAL and have everybody head over to the same place – and pay the same price to watch the SAME content! Until Aussie Netflix gives us a better selection – I’l keep using http://www.getflix.com.au to gain full access to the American version.
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The “Netflix” tax is likely to be part of next month’s federal budget. Australian Communications Minister said, “The Copyright Act does not make it illegal to use a VPN to access overseas content”. So like before I will use a VPN service like PureVPN, hma, hola etc to access Netflix. It wont track my ip so no tax!
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It’s a free site that allows you to ad in your browser the select a country example USA then creat an netflix account and enjoy the rest of the 7000 new realeses movies . Site is called Hola.org enjoy …. The legend
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