Aussie Netflix subscribers will have to pay as much as 20 per cent more as of the 1st of July when the federal government’s new “Netflix tax” takes effect.
The new tax, announced in May’s budget and known as the digital goods tax, adds 10 per cent to any online goods purchased from overseas – such as SVOD providers like Netflix.
On top of the 10 per cent tax, it’s understood that Netflix had also planned to charge customers an additional 10 per cent and so will be slipping the subs increase as of today for new subscribers and in a month’s time for existing ones.
The price increase will be the first since the SVOD started streaming in Australia two years ago and comes at a time when Foxtel is offering a number of considerably low packages starting from as little as $10 a month.
Although it’s bad news for Netflix subscribers, it’s good news for the federal government’s coffers with some 2.8 million Australian households now Netflix subscribers.
Foxtel still wins the subscriber battle at 2.9 million households, however, Netflix could pinch that title anytime soon.
It also follows news, reported on B&T yesterday, that Facebook has unveiled tentative plans to play in the SVOD space with reports it’s prepared to spend a whopping $US3 million an episode on new shows aimed at a Millennial market.
The new price increases for Aussie Netflix subscribers will see the standard package rise to $9.99 a month, the two-user HD package rise to $13.99, and the top four-user package swell to $17.99 per month. Meaning those on the top package face a 20 per cent increase.
Commenting on the price hike, a Netflix spokesperson told B&T: “From time to time, Netflix plans and pricing are adjusted as we add more exclusive TV shows and movies, introduce new product features and improve the overall Netflix experience to help members find something great to watch even faster.
“We also adjust plans and pricing to respond to local market changes, such as tax or regulatory changes. Since launching in Australia in 2015, we have not changed pricing. In light of the upcoming GST increase, we will be rolling out updated plans and pricing starting June 28 in Australia. Members will be notified of the changes via email and service notifications.”