Australian federal government is extending its 10 percent GST to “intangible services” include digital content, games, software. This decision will have an impact on online streaming services, including Netflix. This is the reason, the tax which will be implemented on July 1, has been dubbed as the Netflix Tax.
In a bid to cover the taxes, Netflix might charge its Australian subscribers an increase of up to 20 per cent on its price offerings. For the same, the company is seen testing the price hike on weekends temporarily while the prices will return back to normal on Monday.
The Australian, observed the tested price changes weekend as: the basic service was rose to $9.99 a month from $8.99, the standard service went up from $11.99 to $13.99 and the premium service increased by $3.00, from $14.99 to $17.99. In a statement, the company mentioned,
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.
Also, a Netflix spokesperson was quoted saying that even though the pricing seemed to have lifted up during the weekend, i.e. on May 13th and 14th, no subscribers were charged higher than the current rate. Also, the spokesperson further elaborated,
We continuously test new things at Netflix and these tests typically vary in length of time. In this case, we are testing slightly different price points to better understand how consumers value Netflix.
The company further states that not everyone will see the testing, and this may not be even offered generally. However, when asked if the tax would be passed on to the Australian subscribers, the spokesperson said,
We collect and remit tax wherever we are legally obligated to do so.
Netflix has not revealed whether it will be formally announced, but it will certainly affect the local subscribers since they have an access to only 40% content of the US content library.