Netflix sets its prices in relation to local piracy rates

NETFLIX is slightly cheaper in Australia than the rest of the world. Why? Our downloading habits might have something to do with it.

NETFLIX’S biggest rival isn’t Presto or Stan. It’s piracy, and that’s why we are paying less than a lot of other countries around the world for access to the service.

According to Netflix CFO David Wells, a country’s piracy rate is a significant factor when determining the pricing model for new markets.

In Australia, pricing for the service starts at $8.99 a month for a basic package, while when converted to AUD, Netflix starts at $10.25 in the USA and $11.50 in the UK.

Netflix has always been open about how it feels about piracy, acknowledging that it’s better to offer a service that is better than the pirating option at an affordable price, rather than trying to unsuccessfully bring piracy down.

Pricing is not the only area Netflix looks to piracy for guidance, the company also looks at piracy figures to determine what shows to commission for certain countries to give users exactly what they want when they want it. Beating piracy at its own game.

Netflix is the answer to piracy says CEO Reed Hastings.

Australia has the highest rates of piracy per capita than anywhere else in the world, so for

Netflix, that’s a big concern. But Netflix CEO Reed Hastings told news.com.au last month that he believes his service will be the solution.

“In Canada, lots of people torrented. But since we launched, that rate has dropped dramatically. It’s not zero, but it’s significantly less,” he said.

Australians might see a price rise in the future, however. With Optus today suggesting that it might begin charging streaming services to ensure quality streams are delivered to customers, according to Fairfax Media.

Netflix is already taking a big toll on Australian internet bandwidth, with iiNet revealing this morning that the service now accounts for 25 per cent of the ISP’s internet traffic, up from 3 per cent before Netflix’s official launch.