Sooner or later, Netflix will eventually make it Down Under. It might not be next year, but it will happen.
Once that eventuality comes to pass, the question becomes ‘what will happen to our current video content services?’ After all, Foxtel and the rest certainly can’t compete with the low $10 per month for unlimited access to all their videos on demand. Will Netflix kill Foxtel and the rest of the competition?
Probably not, but it will shake things up a little.
Apples to oranges
To keep things simple we’ll keep the discussion between Netflix and Australia’s current king of video content: Foxtel.
At its core, Foxtel is a dedicated cable TV service that provides scheduled content across multiple channels. There are some Video on Demand (VoD) options, more than there used to be as of this week, main event passes and the ability to record, pause and rewind live TV. Contracts tend to last at least 12 months.
It does not operate over your internet connection and therefore has no impact on your monthly broadband usage cap.
The content on Foxtel ranges from classic movies right up to current, this-season TV shows and recently-released movies. The newer stuff is a little harder to come by – usually only airing at certain times for available as a pay-per-view option – but it is there. Importantly, it is your best option for watching sports in Australia. There’s even a range of documentaries for the more educationally-minded viewer.
Foxtel also has some online components that do use your internet connection. Foxtel Play is an IPTV variant of Foxtel with no lock-in contracts but fewer channels. Presto! is a Foxtel-owned IPTV service that offers only movies and charges only around $10 per month.
At the other end of the spectrum you have Netflix. It operates solely over the internet, although in some regions you can also rent DVDs and Blu-Rays via the postage system. It eats directly in to your data cap. Don’t go thinking any service providers in Australia offer unmetered access to it for any length of time. It’s been estimated that Netflix is responsible for over a third of all internet traffic within the USA and no provider wants to support that kind of activity for free. You’ll need a large monthly data allowance and a fast connection speed if you want Netflix in HD quality.
Content is restricted to TV series, movies and documentaries – no sport. Almost everything is at least a season behind what is aired on TV, and movies are added at best one to two years after they hit the cinema. It’s a vast catalogue of content, but it’s not up-to-the-minute.
The only truly new releases on Netflix are those produced by the company itself. Right now House of Cards (US version) and Orange is the New Black are the two most-notable examples.
There are some great titles on Netflix, but a lot of the content could be politely described as ‘esoteric’, or less-politely as ‘really just there to boost the numbers’. Who knows? Cheesy 70s Sci Fi might be your closet addiction, but even if it is keep in mind that Netflix has a lot of other random stuff that probably won’t push your flashing LED buttons.
On the up-side Netflix costs a pittance – around AU$10 per month. That’s the same as Presto!, except you’re not restricted to a handful of movies.
Granted, if America’s biggest streaming service officially comes to Australia then we’ll probably see the price rise a little, but even at $15 it would be more than affordable. Best of all there’s no lock-in contract and the first month is often free, so if you discover you’re not a fan then you’re hardly going to be out of pocket.
Why it won’t kill Foxtel
These are two very different services. One is up-to-date and has great options for sport lovers, but still relies heavily on a broadcast system. The other is affordable with a huge array of content on demand, but falls short of offering current titles.
It goes on. Netflix won’t be an option for folks with smaller caps. If you decide to upgrade your plan then that’s all well and good, but the added cost of your new broadband contract should be considered part of what you’re paying for Netflix, seeing as it’s the only reason you’re forking out for a bigger data cap.
Then there’s the problem of connection speed. If you struggle to watch 1080p YouTube at home then you can forget watching Netflix in full HD. Also consider what it’ll do to the rest of your household if you share an internet connection. Streaming video uses roughly the same bandwidth as downloading a video file of equal quality and length. That’s a lot of data for the average ADSL connection to handle.
Finally, Foxtel isn’t dead already. Despite being technically illegal in Australia, it’s estimated that over 200 000 Australian households have paid-for and active Netflix accounts thanks to the use of geo-blocking software. 200k houses is a lot of people, yet you still probably know far more folk with a Foxtel subscription than a Netflix one.
It comes down to audience. Foxtel and Netflix appeal to different kinds of viewers. There are a lot of people out there that don’t and probably never will subscribe to Foxtel, yet would consider giving Netflix a go.
There’s also the small detail that an extra $10 per month is small enough that Foxtel subscribers can also sign up to Netflix without having to give up their cable TV subscription.
Thanks to the differing needs of Australian viewers, the low-cost of Netflix and the state of Aussie broadband connections there’s plenty of opportunity for Netflix and Foxtel to co-exist. That being said, the days of more-limited services like Presto! and Quickflix are probably numbered.
Alex Angove-Plumb
Digital Content Editor
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