Netflix isn’t fighting fair in Australia
When it comes to streaming TV like Netflix, Presto, Quickflix and Stan, anyone – in theory – can come along and offer a service that encourages users to subscribe, take a fee, and sell the ability to watch programmes – provided they have the appropriate content licenses. You would think that this is a fair playing field.
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When it comes to streaming TV like Netflix, Presto, Quickflix and Stan, anyone – in theory – can come along and offer a service that encourages users to subscribe, take a fee, and sell the ability to watch programmes – provided they have the appropriate content licenses. You would think that this is a fair playing field.
Sure, there's going to be differentiating factors such as a scale of operating. Look at Netflix, it's a $30 billion company. Look at Stan, it's owned by two much smaller companies. Scale, however, is a product of success.
You'll also look at the content that they have. Well the content is obviously going to be different, because if you negotiate for a programme, you'd be trying to get it as a streaming exclusive in that particular market, such as the case of Stan and Better Call Saul. Obviously, Netflix makes some of its own content, which is another a differentiating factor – but it's still fair.
Then you've got price. Price is an interesting factor; Stan sells for AUD$10 per month. Presto sells for AUD$9.99 per month for either TV or movies, and AUD$15 for a bundle. Netflix starts at AUD$8.99 for standard definition streaming and ends up at AUD$15 per month for the ability to stream in 4K across four different devices.
When it comes to price, part of it is the Goods and Service Tax (GST) that all organisations in Australia are meant to charge. If you subscribe to Stan, 10% of your monthly fee is GST. If you subscribe to Quickflix, 10% of your monthly fee is GST. If you subscriber to Presto, 10% of your monthly fee is GST. But if you subscribe to Netflix, you're not paying any GST. How is that fair?
You'd expect that the manner in which businesses operate under tax legislation would be the same. If I wanted to start a streaming service in Australia, I'd have to collect GST. If I have to, anyone I'm competing with locally should have to too.
It's concerning to hear that Netflix isn't collecting GST, as that gives it an unfair advantage. Stan, Presto and Quickflix are immediately losing 10 cents on every dollar they make through subscriptions, while Netflix isn’t.
Netflix says it doesn't charge GST locally because it doesn't have an office in Australia and it doesn't have staff in Australia. It does however have hardware in Australia that sits within local data centres in order to help distribute content to local customers. If they've got equipment in Australia serving an Australian internet service provider's customers, offering unmetered Netflix, wouldn't they be operating in Australia?
It's disappointing to see an un-level playing field, especially because it’s the Australian businesses that are at a disadvantage. I support competition in streaming services, I'm sure we all do. I just want that fight to be fair.
Stan is co-owned by Nine Entertainment, broadcaster of CyberShack TV