Study shows Oz VOD movie prices are among world’s cheapest

Far from being ripped off by the US studios, Australians can watch new films online in High-Def more cheaply than anywhere in the developed world.

And the average cost of renting new release movies in Standard Def is the second cheapest at $4.25, just 32c more than in the US.

That’s according to a new study by IHS Technology commissioned by the Australian Home Entertainment Distributors Association.

AHEDA commissioned the research several weeks ago to counter “general misinformation” about digital VOD prices, CEO Simon Bush tells IF.

That was before consumer advocacy group Choice accused Foxtel of charging consumers far more to watch TV shows such as Orange is the New Black and The Walking Dead than Americans pay to see those shows on Netflix.

“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.

Bush responds, “What this IHS research shows is Australian consumers are getting some of the best prices in the world for the latest new release films in the format they prefer.

“This is in stark contrast to what groups like Choice would have you believe. Cherry picking a few film titles and comparing then against one market does not constitute proper research and misrepresents the facts. It is time the debate matured in Australia and hyperbole and deception exposed for what it is.”

The IHS research shows Australia has the lowest average price in the world for new release HD films on digital V0D at $5.19, compared to $5.30 in the US and $6.41 in the UK.

AHEDA has not addressed the issue of the cost of buying films online, which is considerably more expensive in Australia than in the US. For example, the Johnny Depp starrer Transcendence costs $US14.99 to buy via iTunes in the US and $24.99 here.

The IHS survey covered countries such as Australia, where there are 36 legitimate online platforms offering film and TV content, New Zealand, France, Germany, Italy, Spain, the UK and the US.

The comparative pricing excludes GST and overseas taxes and is an average of all titles from week one to week 52 of release. Hence the price to watch new Hollywood blockbusters is more expensive in Oz than the $4.25 average: iTunes and Telstra Big Pond Movies both charge $5.99, including GST.

AHEDA is using the findings in its campaign to persuade the government to require ISPs to block piracy sites and to issue three warnings to customers who persistently download content illegally. After the third warning the ISP should slow, or shape, the user’s broadband service, AHEDA advocates.

“The excuse for doing nothing about piracy – including the poor excuse on price – is no more. We need action and a legislative response to reverse our world first piracy rates to ensure we protect the industries that bring this entertainment to our screens,” said Bush.

IHS’s study shows 83% of Australian consumers choose VOD services for digital consumption of new release feature films, compared to electronic sell through.

At last week’s copyright forum Village Roadshow co-chairman Graham Burke said Roadshow is looking to further reduce its digital rental pricing.

Burke says copyright owners and ISPs should split the costs of implementing the graduated response scheme.

Average Prices: VoD SD and HD New Release 2014

VoD New Release Standard Definition High Definition
Australia                             4.25                      5.19
New Zealand                     4.78                      6.23
France                                 4.31                      5.50
Germany                             4.74                      5.79
Italy                                       4.65                      6.10
Spain                                   4.69                      6.16
UK                                        4.61                      6.41
US                                        3.93                      5.30

Source: IHS


– All pricing is cleared from GST/VAT/Sales Tax.
– All prices in Australian dollars with following exchange rates (2012-2014)
o USD = 0.965AUD
o USD = 0.631 GBP
o USD = 0.781 EUR
o USD = 1.234 NZD
– VoD includes both internet VoD and VoD delivered within a pay-TV environment. It does not include subscription services.