Why Presto's Price Cut Won't Stop Aussies Using Netflix

"Foxtel's Presto Movie Streaming Service Is Now Cheaper Than Netflix". That was the headline from Gizmodo's own Campbell Simpson in the wee hours of this morning. Foxtel is finally taking the fight to Netflix on price, but it still won't get online content lovers away from Netflix and onto the Presto service. Here's why.

For those who haven't heard the news, here's a quick refresher before we get into it: Presto used to be $19.99 per month, and now it's $9.99 per month. In our review, we said that Netflix is probably going to cost you roughly $10 per month, or more (depending on how much you pay for a VPN tunneling service to get you into the US).

It's about time that Foxtel started taking the fight to Netflix on Aussie turf, to be honest. Previous strategies aimed at dethroning the absentee lord of streaming services have been half-cocked at best.

Australia's TV executives have tried playing the PR game with Netflix for almost a year now, and still the streaming service attracts Australian users like moths to the flame of cheap, high quality digital content. Australian TV executives tried shaming local Netflix users a while back for being "pirates". Technically, they're right: you are "pirating" content if you use a virtual private network (VPN) to access Netflix from Australia, as it's outside of the licensing agreements that the streaming service has signed in order to offer the content to its users in particular territories. Netflix isn't in Australia at this stage, mostly because all of the movies it would likely stream you are already locked up in exclusive or prohibitively-expensive deals made between studios and the Foxtel monolith. The bottom line is that it'd probably be crap, leading Australians to keep dialing into the US for their streaming fix.

Despite the rationalisation, however, calling Aussie Netflix users "pirates" is a technicality, and a stupid one at that. Normal people don't think about agreements made in boardrooms regarding where content can and can't be streamed. So rather than bitch and moan further, Foxtel decided to try and out-innovate its competition by introducing new movie and TV streaming offerings in Presto and Play.

When we had our meeting about Presto with the big-wigs at Foxtel, streaming video quality was question number two after price. In a bid to deflect away from a sentence that sounds anything like 'we only stream in 480p', Foxtel said that it uses some smarts to determine the user's internet transfer speed and intelligently land on a bitrate at which to stream. Low-quality connections would be fed the blockiest, crappiest 64kbps content imaginable, while those with fast (read: recommended 3Mbps and above) connections would get 1200kbps content.

No matter how it's spun, however, 480p is always 480p, and Foxtel has "no immediate plans" to stream HD content. Translation: don't hold your breath.

In a world of 1080p TVs, Chromecast streaming (which is supported by Presto) and faster internet connections, Presto isn't doing itself any favours by streaming standard definition content, no matter what the price is.

So now that the price of Foxtel's Presto service is cheaper than Netflix for Australians, get ready to hear the streaming quality argument used as an excuse for why people either still get their content offshore, or even worse, pirate it.

"Sure it's cheaper," they'll say, "but I'm spending the extra money on quality HD content". Or, "yeah the price is the same, but what I prefer Netflix's platform and its 4K content". Hint: barely anyone uses 4K content right now, because barely anything is supported. Plenty of VPNs and Aussie connections don't even support HD Netflix.

I actually feel bad writing this and putting it out into the world. Foxtel is doing everything it can to get ahead of the curve, in a market where margins are tight and potential customer numbers are small. Profit isn't a dirty word, remember: Foxtel is just trying to make its way as a business. It just happens to garner itself loads of bad press for seemingly holding content like Game Of Thrones hostage in the Australian market (and charging a king's ransom for access).

Foxtel has heard the gripes we have with Presto's pricing -- at launch we said it was double the price of Netflix locally -- so it halved it to be more competitive. Now, that price is roughly on par and it's definitely more accessible to the Australian public, but still people complain and say they'll be using the US streaming service for one reason or another.

Without even firing a shot, Netflix has won the war for Australian hearts and minds. Of course, even if Presto did go pixel-to-pixel and dollar-for-dollar against Netflix, people would still object to Foxtel on moral grounds. When I tweeted that Presto had Netflix on price in Australia this morning, I got more than a few of these in response.

Will we ever be happy? Or will we always just be "pirates"?