Netflix Tested a Price Hike in Australia
Netflix customers in Australia could soon be facing steeper monthly charges.
The popular streaming service on Monday confirmed that it recently tested higher subscription prices for new customers in Australia. The company—which has nearly 100 million global subscribers and expanded to Australia in 2015—has reportedly tested raising prices for new subscribers by as much as three Australian dollars (AU).
Netflix’s test resulted in some Australian customers seeing price increases for the streaming service’s Basic plan (going from AU$8.99 to AU$9.99 per month), while Netflix’s Standard plan increased AU$2 to AU$13.99 and the Premium plan increased AU$3 to AU$17.99 per month, according to The Australian.
Netflix confirmed the tests, but emphasized that it has not yet formally announced any permanent price increases. “We continuously test new things at Netflix and these tests typically vary in length of time,” the company said in a statement. “In this case, we are testing slightly different price points to better understand how consumers value Netflix. Not everyone will see this test and we may not ever offer it generally.”
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While earlier reports by The Australian newspaper suggested that Netflix is testing price increases that would only be implemented on weekends (with prices returning to normal during weekdays), the company denied that interpretation of its recent tests. In an email to Fortune, a Netflix spokesperson noted that “these tests vary in length, they are not weekend only.”
Netflix could be considering a potential price increase in Australia in response to that country’s recent decision to extend the federal government’s 10% goods and services tax to cover “intangible supplies,” including digital content and streaming services like Netflix. Nicknamed the “Netflix Tax,” the extended tax will start affecting companies like Netflix when it goes into effect on July 1.
Netflix has seen some backlash in recent years due to previous price hikes in the U.S. and abroad. Last year, despite warning customers well in advance of impending price increases, Netflix still saw quite a few customers cancel their subscriptions over higher monthly charges. Still, those occasional bumps haven’t stopped Netflix’s march toward 100 million global subscribers, and the streaming company needs to steadily raise its prices over time if it wants to cover the ever-increasing costs associated with growing its library of content and expanding its global presence. This year alone, Netflix plans to spend $6 billion to produce more than 1,000 hours of original content.