Dear Gizmodo, I recently read that Netflix is planning to increase its prices in the USA this year. Does this mean Australia will be getting a price hike too? In my opinion $8.99 a month is the definite sweet spot; any more and I'd need to reconsider piracy. Thanks, Paying Enough Already
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For the uninitiated, Netflix has announced it will be increasing its entry-level pricing to $US9.99 per month for all US customers starting in May. During a quarterly letter to shareholders, Netflix explained the reasoning behind the price hike:
"With respect to ungrandfathering, currently, more than half of our US members pay only $7.99 or $8.99 for our $9.99 HD 2screen plan. We will phase out this grandfathering gradually over the remainder of 2016, with our longest tenured members getting the longest benefit."
So how does this affect Australian users? The answer is it doesn't; at least, not for the time being. Even if you've managed to connect to the US library with a working VPN, you'll continue to be charged Australian pricing (provided you originally signed up to the service locally.)
There are a few reasons why we don't think Netflix will increase its Aussie pricing any time soon. The service is currently the industry leader in Australia, with a market share that eclipses Stan, Quickflix and even Foxtel. A big part of this success comes down to attractive pricing.
At $8.99 per month, the standard package is currently the cheapest in the country; albeit by a single dollar. (Stan, Quickflix and Presto all hover around the $10 mark.) This doesn't leave Netflix with much room to maneuver if it wants to retain the title of "most affordable streaming service in Australia".
Plus, a price-hike this early in the service's lifespan would be seen as a cynical move by many -- bad publicity is something Netflix really doesn't need at the moment. As it looks to increase and solidify its market dominance, the last thing Netflix will want to do is piss off existing customers.
The whole "pricing parity" argument doesn't hold water either when you consider how much more content US customers get. Frankly, we should be paying less in Australia.
Instead of increasing its pricing, we think it's more likely that Netflix will attempt to incentivise users to upgrade to its HD and 4K offerings which run for $11.99 ad $14.99 a month, respectively. We've contacted Netflix for comment and will update the article as soon as we hear back.
With all that said, it's a pretty safe bet that Netflix will "revise" its monthly pricing in Australia at some point in the future. Nothing stays the same price forever, including fixed subscription services. The only question is when this inevitability will eventuate. Personally, we think we have a good year or so to go.
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