Executives from US content streaming Company Netflix who attended this year’s CES 2014 confirmed with SmartHouse that they have more than 100,000 registered Australian accounts that have accessed their service a number that is causing concern at Foxtel.
Some sources claim that the amount is over 200,000 and growing as the Company delivers shows like House of Cards and Arrested Development.
One source said recently that more people are watching House of Cards via illegal Bit Torrent sites that are paying via Foxtel who SmartHouse understands has approached Netflix to turn off the Australian accounts as it is impacting their ability to sell Netflix content in Australia.
Later this year a 4K version of House Of Cards along with several other Netflix shows will be available via LG Electronics Ultra High Definition TV’s.
During an interview with SmartHouse at CES Netflix CEO Reed Hastings said that the only issue holding his Company back from launching their service in Australia was the cost that movie studio’s wanted to charge Netflix for granting access to their content.
We have also been told that Foxtel executives have approached US studio executives about the potential of losing viewers to Netflix, the subscription TV service is concerned as to the impact that Netflix could have on their growth moving forward.
Foxtel’s biggest concern is that Netflix is flouting international regulations by accepting payments from Australian credit cards.
Currently Australian users of the Netflix service are easily bypassing geo-blocking using VPN manipulation or a fake IP addresses that can easily be obtained online.
The Australian newspaper which is owned by News Corporation who also own 50% of Foxtel said that the major issue now for Australian broadcasters is that any local subscribers Netflix allows dilutes the value of their output deals with international partners, such as Nine’s with Warner Bros or Foxtel Movies’ with various Hollywood studios. The number of viewers lost to Australian networks is unquantifiable though.
“This is an issue the US studios should be taking up with Netflix because they’re not getting paid,” one network executive said.
The issue is not likely to fall within the federal government’s anti-piracy agenda.
One executive said Australian networks had two courses of action to counter unofficial Netflix subscribers: combat piracy or make content cheaper and easier to access.
This week, Foxtel confirmed plans to establish a beachhead against Netflix with the launch of its Presto subscription video service on March 13.
Complementing its Foxtel Play service, the stand-alone streaming service will not require a Foxtel home subscription and has a competitive advantage with its strong movie line-up.
Foxtel also unveiled a discount Foxtel Play deal for Game of Thrones after sewing up exclusive digital rights to the popular fantasy drama, to the chagrin of many Australian fans. Game of Thrones is the most pirated TV series by Australian consumers.
