Foxtel defends pricing

09 September, 2014 by Don Groves

Foxtel has angrily rejected criticism that it is ripping off consumers who want to watch US dramas such as Orange is the New Black and House of Cards.

Consumer advocacy group Choice alleged the second series of the Netflix-produced prison drama cost $45.45 via Foxtel Play, 431% more than Netflix charges.


The upcoming season five of The Walking Dead would cost $39.99 through iTunes, 376% more than UK consumers will pay to stream it and 300% more than Foxtel's annual subscription, Choice claimed.

“Time and again we are seeing consumers hit with the ‘Australia Tax’ on digital content. It’s clear the business models forced on consumers by local intermediaries are subjecting Australians to artificially high prices for overseas content,” Choice CEO Alan Kirkland said.

“Consumers are asking themselves why they have to pay a premium to Foxtel when they can access and pay a reasonable price for content through legitimate overseas services like Netflix."

Choice has made invalid comparisons between completely different products to justify its claims, responded Foxtel group director of corporate affairs Bruce Meagher.

“To compare Foxtel’s service with that of Netflix in the US is nonsensical," Meagher said.  "Netflix is essentially a library service which, due to its success, has been able to commission a few high quality and popular dramas. So while it is true that consumers can get access to Orange is the New Black and House of Cards as part of their Netflix subscription that’s basically where the new content offering ends.

“To acquire other new dramas US consumers have to sign up to different service providers, and given that drama lovers don’t just watch one show, this is what they inevitably do.

“As part of a Foxtel service consumers can get access to virtually every major new US drama produced, usually within hours of its American broadcast. They also get a huge range of UK dramas, Australian dramas especially commissioned by Foxtel, plus a host of other general entertainment, sport, documentary, news and kids programming.

“To acquire a similar cable or satellite subscription service in the US, consumers would pay a similar price and depending on the bundle structure offered by particular suppliers sometimes more.”

Meagher also pointed out that as Netflix does not licence Orange is the New Black to other US broadcasters, US consumers would need to pay for Netflix if they want to watch that show.

And he noted Foxtel will become even more affordable when it introduces its $25 entry level package on November 3 .

Foxtel's new pricing for its main service and for movie streaming service Presto are pre-emptive moves against the upcoming launch of Nine Entertainment/Fairfax Media's StreamCo and the expected arrival of Netflix in the first half of 2015.