Netflix Already Regrets Its Unmetered Agreements With Aussie Providers

16 April 2015 | 4:44 pm | Staff Writer

"We should have avoided that and will avoid it going forward."

US-based TV & film streaming service Netflix is already experiencing some regrets over elements of its Australian launch, as chief executive Reed Hastings expressed lament over the company's agreements with local internet service providers such as Optus and iiNet for unmetered usage deals.

According to Fairfax, the deals were finalised ahead of Netflix's March launch Down Under with consideration to the widespread presence of data-capped internet accounts in the country and enabling users to watch Netflix unmetered — thus, not count towards their overall usage.

Although the incidence of data caps has been decreasing for some time or, alternatively, their limits increasing, Hastings said, anything but unlimited internet accounts are tantamount to discrimination as they "inhibit internet innovation and are bad for consumers".

"In Australia, we recently sought to protect our new members from data caps by participating in ISP programs that, while common in Australia, effectively condone discrimination among video services — some capped, some not," Hastings said.

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"We should have avoided that, and will avoid it going forward."

The company may not face much resistance from Australian ISPs going forward, however, with Fairfax citing a Telstra spokesperson who said the telco had recently begun increasing its data allowances, while iiNet carries a sub-$100, 600GB monthly plan. Optus, however, explicitly supports unlimited data for consumers of high amounts of entertainment content.

An Optus spokesperson told Fairfax: "While Optus thinks unlimited data is the best option for anyone who wants to stream lots of entertainment content, we chose to unmeter Netflix content so that no matter how much data is included in their plan, all our broadband customers can watch as much Netflix as they want."

Despite the concerns over the unmetered usage deals, the US company is reportedly happy with its progress into the Australian market, with Hastings describing its outlook going forward as "bullish" in the long-term, and Netflix's director of corporate communications, Cliff Edwards, even hinting that the streaming service may look at generating original content in Australia in future.

"We don't come in and say, 'Now, or 12 months from now, we have to have six Australian originals'," Edwards said. "We get pitches from folks and, if they're made in Australia or made in New Zealand or made anywhere else, the fact of the matter is they're good stories and that's why we pick them up.

"We're very open and have always said we're very open to funding originals in Australia, New Zealand, or anywhere else."