The boss of Australian Subscription Video on Demand (SVOD) provider Quickflix has launched a stinging attack on his overseas rival Netflix last night, and its an argument that I fully agree with.
In an open letter addressed to Netflix CEO Reed Hastings (published below), Quickflix CEO Stephen Langford challenges Netflix to “come through the front door” rather than continuing to accept Australian customers on its US based service illegally.
Despite having never launched in Australia, it is believed the company has gained between 200,000 and 500,000 customers in this country.
Subscribing to Netflix is remarkable easy for the average Australian. Unlike rival SVOD services such as Hulu and Amazon, Netflix happily accepts Australian credit cards. Has failed to block known VPN providers, and makes no effort to check the validity of its customers addresses with many Australians using obviously bogus details such as ‘1 Times Square’ or ‘The White House’.
Customers subscribing to Netflix are paying no GST on the purchase putting local providers at an instant price disadvantage. Unlike Foxtel, Netflix invests zero funds into local content production.
While its true Netflix has helped bring competition to the Australian market pressuring Foxtel to announce a recent price cut, the Netflix ‘Australian business’ is built on a false economy as it uses the size if it’s US business to secure content far cheaper than local providers could ever hope too, while continuing to avoid paying local content distributors for the programming it is broadcasting in this country.
Netflix has enjoyed a remarkable ‘cult’ status in this country with local tech journalists refusing to say anything negative about the company. Consumer group Choice has been remarkably outspoken in its support having launched a full blown advertising campaign to help aid Netflix’s illegal activity, often doing so with misleading or unfair comparisons.
If Netflix is keen to do business in Australia they are most welcome. Productions such as House Of Cards and Orange is the new Black are already beloved by Aussie fans. But unless they are willing to open an Australian office, start paying tax and investing in the local industry, they are not much better than the pirates they pretend to be defeating.
Open Letter from Quickflix CEO Stephen Langford to Netflix CEO Reed Hastings
Dear Mr Hastings,
If you want Netflix to compete in Australia come through the front door.
Instead you’re currently enjoying a free ride in Australia ignoring unauthorised “back door” access to your US service and thereby taking revenue away from local services which are investing to service the local market and endeavouring to provide choice and competition to consumers.
Netflix not only knowingly collects revenues from subscribers with unauthorised access to your US service, investing nothing in the Australian market nor paying for Australian rights to the content you make available, but also tacitly encourages Australian consumers to inadvertently breach the copyright of the content owners.
Unlike yourself, Quickflix has obtained all necessary Australian rights to the content on its platform, faithfully meets all necessary security requirements, including geo-filtering imposed by the content rights holders, and continues to reinvest in its service with the goal of offering the very best service in the market to its customers.
Quickflix is growing its streaming service and is by far the most accessible streaming service in the market with Australian customers having access through almost half a million registered devices including smart TVS, game consoles, mobiles and tablets. But if Netflix continues to filch revenues through allowing unauthorised access, Quickflix and other local services will not be as viable as they could be nor compete as vigorously as they could. Without strong local competition Australian audiences will suffer in the long run with fewer choices, less compelling offerings and higher prices.
So Mr Hastings, we challenge Netflix to play by the rules. It’s how we do it here in Australia.
Stop turning a blind eye to the VPN services acting as a gateway to your service. Be honest and face up to the issue of unauthorised access to your US service. Have the courage to limit your service only to the territories where you have legally obtained the rights to operate by abiding by the geo-filtering obligations required by your content license agreements. And do so immediately.
Quickflix is pro-consumer, pro-competition, and pro-Australia. Should you decide to enter Australia through the front door, Quickflix will be happy to compete with you, fairly and squarely.
Yours sincerely,
Stephen Langsford
Chief Executive Officer
Quickflix Limited
