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Netflix hikes NZ pricing by up to 19 per cent

Author
Chris Keall - NZ Herald,
Section
Business,
Publish Date
Thursday, 1 August 2019, 9:31AM
Photo / 123rf
Photo / 123rf

Netflix is increasing the prices of all of its plans for Kiwis, with its top plan being bumped up 19 per cent to $21.99 per month (see table below).

The price of a Basic Plan, which lets you stream to one device in standard definition, is rising 4 per cent to $11.99 a month.

A Standard Plan, which lets you stream to two devices at the same time in high definition (HD) increases 13 per cent to $16.99.

And a Premium Plan, which supports streaming to up to four devices in HD, jumps 19 per cent to $21.99.

The price rises make Netflix more expensive than local contenders Sky TV-owned Neon ($11.99 to $20.00) and Spark-owned Lightbox ($12.99 to $15.99), and Spark Sport ($20/month) although Netflix can boast a larger lineup of content, a broader range of devices supported, plus the ability to download content to watch later (at least for some series and movies).

Source / Netflix
Source / Netflix

The Netflix price rises apply immediately for all members, and to existing subscribers "over the coming weeks, depending on their billing cycle," the streaming giant says.

A spokeswoman for Spark offered pointed cheekily pointed out that "The current Spark Netflix offer means broadband customers on entertainment plans get Netflix included for as long as they are on the plan, so Spark customers won't be affected by any changes announced today."

Netflix won't say how many subscribers it has in New Zealand (worldwide, it has 151 million) but surveys indicate it has upended the market since its arrival four years ago. A June 2018 Roy Morgan survey found that nearly two million Kiwis live in a household with Netflix access.

The move comes despite a backlash to a recent round of price rises in the US, which saw Netflix register its first-ever quarterly decline in subscriber numbers in its home market - which in turn sparked a 10 per cent slump in its share price

Netflix has moved into the black over the past few years (it made a profit of US$271 million on revenue of US$4.9 billion in its June quarter).

But its push to create a library of original content has seen its debt balloon to more than US$10 billion - hence the need to squeeze more money from its subscribers, despite increasing competition from the likes of Hulu and newcomers HBO Max and Disney Plus in the US, and Sky TV's Neon and Spark's Lightbox in NZ.

"We change our prices from time to time to reflect the significant investments we've made in new TV shows and films - such as Sex Education and Stranger Things - as well as improvements to our product," a Netflix spokesman said.

Although its service has been in Australia and New Zealand since 2015, Netflix has just but boots on the ground for the first time, opening an office in Sydney with six new hires - including one poached from Spark Sport.

Netflix says the cost of producing original programming such as Sex Education (pictured) is a factor behind its price rises. Photo / Netflix.
Netflix says the cost of producing original programming such as Sex Education (pictured) is a factor behind its price rises. Photo / Netflix.

The move comes as Australian politicians mull an Australian Competition and Consumer Commission recommendation to require Netflix (and Amazon's Prime Video and Google's YouTube) be brought under the same rules as traditional broadcasters and required to produce more local content.

Currently, Kiwi faces are few and far between on Netflix, with a notable exception being Dark Tourist host David Farrier.

Asked if Netflix planned to commission any local content, the spokesman said, "We are looking forward to announcing further plans for investment over the next year."

New Sky TV boss Martin Stewart has plans to boost his company's sports streaming app Fanpass (which will shortly get its number of channels boosted from 4 to 12, with all in HD).

Stewart says Neon is also due for a shot in the arm, but details have been scant so far.

Spark says it will bid for more A-list sports to feature on Spark Sport, in a bid to maintain momentum after the Rugby World Cup.

But the telco's interest in its entertainment-based streaming service Lightbox seems to be fading. In March, it said it was looking for a Lightbox partner - a move seen as a precursor to a possible sale.

Analysts say a Spark focus on sport makes sense, given the likes of Netflix and Amazon's Prime Video are globalising the entertainment market.

The streaming contenders

Key players in the increasingly crowded global and local scene:

Netflix
With just under 150 million subscribers worldwide, Netflix is the largest streaming service on the planet - and its 2015 launch into New Zealand was the catalyst to push streaming into the mainstream here. Netflix began by emphasising its "long tail" of content - mostly licensed from movie studios and TV channels - it now focuses on making its own shows and films or original content. Netflix costs $11.99 to $21.99 per month. All plans include access to all content, but you get support for four screens and 4K definition on the most expensive plan. Like all of the streaming services, there are no contracts - you pay by the month and or put your plan on hold when you like. Historically, Netflix has been streaming only - but now it's letting you download and store an increasing number of shows, which is useful if, say, you're about to take a long plane trip and want to take your tablet for some DIY inflight entertainment.

Lightbox
The Spark-owned Lightbox is like Netflix but without original programming and pay-per-view movies. You can stream all the TV shows you like on a $12.99/month (two screens) or $15.99/month (four screens) plan. Movies cost between $4.99 and $6.99. Spark recently said it was seeking a partner for Lightbox. The basic plan is free for Spark broadband customers.

Neon
Neon is owned by Sky TV, but operates separately as a Netflix-style service that costs $11.99 for TV shows only or $19.99 a month for TV shows plus movies. There's no original programming, but there is a lot from the award-winning US network HBO (which Sky also leans on heavily for its Soho channel). It's a good option to binge on hit HBO fare like Game of Thrones or Big Little Lies without having to take a Sky contract. Neon began its life with relatively thin content as Sky fretted about cannibalising its traditional business, but these days it's a lot bolder and more fleshed out - so it's worth taking a second look.

Fanpass

Also owned by Sky TV, but offers streaming versions of Sky Sport channels 1 - 4, plus selected events (often big-name boxing bouts or UFC brawls) offered on pay-per-view.

Sky has recently slashed Fanpass's pricing. It costs $15.99 for a version you can only watch on a mobile, $38.99 a month if you commit to six months or $58.99 per month otherwise (which is down from the recent $100 per month).

The downsides: it's still pricey, content mostly live only (though there are some highlights on-demand) and there's much more to Sky Sport than channels 1 to 4.

So many dedicated sports fans will still be hesitant to cut the cord on their decoder and go Fanpass-only.

Sky TV's new boss Martin Stewart says he has plans to add more content to Fanpass, however, so watch this space [UPDATE: Sky plans to boost its number of sports channels to 12 during August; all 12 channels will be available through Fanpass, which will be re-branded Sky Sport Now.]

Sky Go
Sky Go lets subscribers to Sky TV's traditional service watch selected channels - including most of its sports content and boxed sets, on a PC, tablet or phone. In its early days, Sky Go was famous for falling over and blank-screening during big events, and it got a well-deserved shellacking on social media. But Sky has continued to incrementally upgrade and tweak it, and it's now pretty solid service. The cost is included with your Sky TV subscription.

Sky TV On Demand
A lot of the content that Sky TV broadcasts can now also be streamed free by subscribers. It can be a good alternative to recording a show to your decoder's hard drive. The selection of content you can access on Sky TV On Demand depends on the channels you're subscribed to with the pay-TV broadcaster's traditional service. If you Soho is part of your channel mix, you'll be able to stream Soho content from Sky TV On Demand, for example. To use Sky TV On Demand, you have to connect your Sky decoder to your modem via a Wi-Fi dongle called a Sky Link (contact Sky and they'll send you one free) or ethernet cable, which you can pick up at any computer or consumer electronics store. A DIY guide is online here.

Amazon Prime Video
Netflix's biggest global competitor, owned by Amazon as in Amazon the giant online retailer. And like Netflix, it's made a big push into original programming including its showpiece The Grand Tour, fronted by Top Gear alumni Jeremy Clarkson, James May and Richard Hammond (who it turns out are a bit dull when they are given complete artistic freedom. They were more fun when they had BBC rules to subvert) plus a lot of other big-budget series. Prime Video has also made a number of sports documentaries, including a series covering English Premier League side Manchester City and a reverential-to-the-point-of-dullness effort on our own All Blacks. Prime Video charges Kiwis in US dollars and costs US$2.99 ($4.30) a month for your first six months then US$5.99 ($7.20).

TVNZ OnDemand and 3Now
Our big two free-to-air broadcasters offer an increasing amount of content via their streaming services. And TVNZ, especially, is offering some series via is online service only, such as the recently added Catch 22. The streaming services can be a good alternative to recording a show. But as with all online services, their subject to "windowing" - or only being able to get rights for content for a certain period of time - so a lot of content disappears after a while. Freeview's streaming service is also a good way to tap into TVNZ and 3's online content, plus that from other free-to-air broadcasters.

Apple iTunes 
The New Zealand version of Apple's iTunes offers a selection of pay-per-view movies on-demand (unlike Netflix, it's not all-you-can eat for a fixed monthly sub, though Apple is teeing up a new service that will offer that option). Some people like to sneak on to the US version of iTunes, too, which offers a broader selection of movies and adds a lot TV series, too. Apple is in the process of splitting up iTunes, which began life as a music-only service, into music, podcast and TV apps.

Google Play, YouTube Premium
Google's online store (which also features apps, music and e-books) offers a selection of pay-per-view movies for streaming at $6.99 to $7.99 a pop, with catalogue titles cheaper. As with Apple's service and others, rights issues mean Kiwis get a smaller selection of content. Elsewhere in its empire, Google offers YouTube Premium for $15.99 a month - a paid version of its popular video-sharing service that lets you avoid ads and access additional content created by various YouTube stars.

Hulu
Hulu began life as a cooperative venture involving most of the US free-to-air network and movie studios, though recently Disney has bought out others to build a majority stake. Hulu makes some original programming, including The Handmaid's Tale (which streams on Lightbox here) but the bulk of its content is drawn from shows currently screening on US TV (in contrast to Netflix, which mostly shows library content outside its original programming). If you want to watch Saturday Night Live just hours after its screened in the US, Hulu is your place. Hulu is geo-blocked to Kiwis but relatively easy to access and subscribe to using a VPN and gift cards (see "What about piracy?" below). It costs US$5.99 ($8.60) a month with ads or US$11.99 ($15.80) per month ad-free.

Disney Plus
A service that's yet to launch but has already got a lot of press. Disney Plus will carry shows made by Disney and its various subsidiaries, plus original programming. It will launch in the US in November for US$6.99 ($10) per month. There's still no word on any possible local launch. The fact Sky TV has a multi-year exclusive broadcast and online deal for existing Disney content will probably put the kibosh on any NZ version.

BBC iPlayer 
The Beeb's iPlayer service features its radio and TV content. It's free for Brits (or, at least, included in their TV license fee) and geo-blocked to others, but it's another service that Kiwis can sneak a peek at relatively easily.

Stuff Pix
Stuff Pix - which rose from the ashes of the failed Australasian streaming contender Quickflix - offers a modest selection of movies, priced between $1 and $7. There's no unique or original content, so some seeking a generic movies-for-hire service might be more drawn to Apple's iTunes or Google Play.

HBO Now
The US$14.99/month HBO Now is a service that delivers content straight from the US network to its audience via the HBO Now website or app - cutting out the middle man from old-school aggregators like Sky TV to new-school players like Netflix and Amazon Prime. HBO Now is not available here yet, because Sky TV owns local HBO rights, but the trend of content creators using the internet to reach their audiences directly is one to watch - particularly as sports organisations get in on it too.

Q: Is it piracy to access the US version of Netflix?

A: It's still not hard to find out-and-out pirated content on the internet; sites and services that will let you download new release Hollywood movies and other content without paying a bean. That's illegal, and with so much low-cost content now available to Kiwis through street-legal channels, you no longer have the excuse that NZ is being ignored and you have no other choice.

But then there's virtual private network (VPN) software that's easy to find, which lets you access, say, the US version of Netflix or iTunes, which both boast more content than their NZ incarnations, plus the likes of the UK-only BBC iPlayer or the US-only Hulu. And gift cards can be used to pay for a monthly sub, eliminating the need for a local credit card. Is that legal? It's a gray area. Sky TV would argue "no", but a number of lawyers and legal commentators - including Lowndes Jordan partner Rick Shera - who argue it's just the online equivalent of parallel importing and perfectly legal. There has never been a test case to resolve the issue. The Copyright Act (1993), which was authored before the internet went mainstream, let alone anyone conceive of streaming, is about to get an overhaul, which should help clarify things.

ON AIR: Heather du Plessis-Allan Drive

4PM - 7PM