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Subscription video-on-demand services such as Netflix are experiencing an increasing uptake among Australian consumers, however concern exists that NBN pricing structures will see the cost of such services shoot upward.Since its arrival in Australia, Netflix has been a popular choice for consumers, in turn leading to increasing data demands. Following launch of the service, iiNet and other ISPs were faced with issues of slower internet speeds, with traffic demands surging.
While ISPs are currently offering customers a range Netflix-inclusive, high data capacity and unlimited download plans, iiNet chief executive David Buckingham has told Fairfax Media customers could be financially hit once the NBN is completed due to current pricing arrangements.
As reported by Fairfax, an issue for ISPs has been the NBN’s connectivity virtual circuit charge (CVC), priced at $17.50 per 1 megabit per second, with iiNet chief technology officer Mark Dioguardi in April warning users could be forced to pay a “Netflix tax” of $26 a month extra for moderate HD streaming, again rising for 4K streaming.
Buckingham told Fairfax it’s “a problem that needs to be dealt with”, adding that he’d “like to think that NBN will tackle the problem” prior to consumers bearing the financial strain.
An NBN spokesman, meanwhile, told Fairfax it will continue to engage with retail service providers on its commercial model as more premises connect.
