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4093 posts

Uber Geek


  # 1261097 17-Mar-2015 14:37
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Looks like Netflix might be getting into a bit of spat over GST with the other local providers in NZ and OZ,

 

http://www.stuff.co.nz/technology/digital-living/67424859/netflix-wont-charge-kiwis-gst

 

I'm thinking that the big global digital content provders ( Apple, Netflix, etc) are gonna have to start playing nice with Government's. soon

 

 

South Africa were the first to tax digital content imports, they wont be the last.

1126 posts

Uber Geek


  # 1261101 17-Mar-2015 14:42
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Good luck with that lol




Most problems are the result of previous solutions...

All comment's I make are my own personal opinion and do not in any way, shape or form reflect the views of current or former employers unless specifically stated 

 
 
 
 


345 posts

Ultimate Geek

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  # 1261105 17-Mar-2015 14:51
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Interesting problem, ... that 15% gives netflix a pretty big advantage over lightbox




 


1139 posts

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  # 1261253 17-Mar-2015 19:51
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Killerkiwi2005: Interesting problem, ... that 15% gives netflix a pretty big advantage over lightbox


It's been a problem for many years and the gov has done nothing about it. American IT companies love to avoid local taxes and have done for years.

That's why you and I pay so much and the problem will get worse unless the gov finally grow some balls and acts now.

(A business owner that pays many hundreds times more in tax per taxable dollar than most american companies) 

49 posts

Geek


  # 1261409 18-Mar-2015 09:07
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Killerkiwi2005: Interesting problem, ... that 15% gives netflix a pretty big advantage over lightbox


I think their 15% price advantage is fairly minor compared to their device advantage.

My Xbox one and 360 already have the Netflix app. I guess my Sony TV and blu-ray player will get it in the next week or so if they don't already have it. Its apparently compatible with my Nexus 10 too. Lightbox has apps for none of these. They're not available on my TV at all. The price difference would have to be a lot more than 15% (or their library a *lot* better) to force me to replace something.

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Uber Geek

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  # 1261410 18-Mar-2015 09:13
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Isn't it about content? If one service is useless and costs $5 and another is great and cost $16, what would we buy? The public will see what content each has, and buy those. Maybe one, two or maybe three services. While the GST is certainly an issue of discussion, at the end of the day its about viewing what we prefer to view. These online services are all low cost which is great

152 posts

Master Geek


  # 1261414 18-Mar-2015 09:23
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I think NZ retailers are deluding themselves if they think that all their issues relate to the GST inequality.

By the way, the app is now installed on my 2013 Samsung Blue Ray player - but I had to search for it. It did not appear on the What's New and Video sections, but a search located it. Goes well.

 
 
 
 


2688 posts

Uber Geek

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  # 1261418 18-Mar-2015 09:29
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foamfollower: I think NZ retailers are deluding themselves if they think that all their issues relate to the GST inequality.


Yep. I imported a turntable a couple of years ago, saving myself $250 over RRP. Add GST to that purchase and I would've still saved $180 

6434 posts

Uber Geek


  # 1261425 18-Mar-2015 09:44
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davidrg:
Killerkiwi2005: Interesting problem, ... that 15% gives netflix a pretty big advantage over lightbox


I think their 15% price advantage is fairly minor compared to their device advantage.

My Xbox one and 360 already have the Netflix app. I guess my Sony TV and blu-ray player will get it in the next week or so if they don't already have it. Its apparently compatible with my Nexus 10 too. Lightbox has apps for none of these. They're not available on my TV at all. The price difference would have to be a lot more than 15% (or their library a *lot* better) to force me to replace something.


I think it's the other way around. The 15% GSt advantage aplies to every customer.
The device advantage is only meaningful for people who don't the devices that Lightbox etc support.  Since PS and Samsung are by far the most popular consoles and smart TVs in NZ, the device advantage for people who have them is nothing.
 
(and, as Lightbox add more devices that will close the gap further, whereas the GST advantage will apply forever, and only get bigger as they have more and more customer.)

But don't think about it so much as a difference in price of 15%, think about it more in the context of how much resource this tax takes away from the businesses.

Just on the customers that Lightbox is forecasting this year - 70,000 paying* (i.e. excluding the 'free' spark customers) that amounts to around $1.5m of annualised tax for Lightbox. 

Just think how many extra devices Lightbox could have added if they had an extra $1.5m of margin to play with each year (if they could somehow structure themselves to avoid GST)  and that's just on the first year's customer base. $1.5m is enough to pay a pretty large team of software developers (10-15 people) to create apps galore. 

As the paying base grows, that differential becomes bigger and bigger.  On a base of, say, 300,000 customers that difference becomes a whopping $7m in GST charges every single year.  That's an absolutely enormous amount. 

*Sauce:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11312750
"Spark's new internet television service is aiming to attract at least 70,000 paying customers by the middle of next year."

6434 posts

Uber Geek


  # 1261426 18-Mar-2015 09:46
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tdgeek: Isn't it about content? If one service is useless and costs $5 and another is great and cost $16, what would we buy? The public will see what content each has, and buy those. Maybe one, two or maybe three services. While the GST is certainly an issue of discussion, at the end of the day its about viewing what we prefer to view. These online services are all low cost which is great


Yep,  and having to shell out 15% of your revenue as tax means you have a lot less money to pay for content or device support compared to an equivalent business who doesn't need to charge that tax.

3594 posts

Uber Geek


  # 1261433 18-Mar-2015 09:54
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dclegg:
foamfollower: I think NZ retailers are deluding themselves if they think that all their issues relate to the GST inequality.


Yep. I imported a turntable a couple of years ago, saving myself $250 over RRP. Add GST to that purchase and I would've still saved $180 


Interesting example, especially if you only paid $200 NZ for the turntable.
But if the turntable was worth $1000... and you'd received a 20% discount during a sale or through haggling, you'd have local warranty support.
Then if you required a transformer to deal with power incompatibilities, it would have been another interesting aspect to deal with.

I'm sure none of this applies, but sometimes the up-front savings aren't the entire story.

18103 posts

Uber Geek

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  # 1261454 18-Mar-2015 10:05
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NonprayingMantis:
tdgeek: Isn't it about content? If one service is useless and costs $5 and another is great and cost $16, what would we buy? The public will see what content each has, and buy those. Maybe one, two or maybe three services. While the GST is certainly an issue of discussion, at the end of the day its about viewing what we prefer to view. These online services are all low cost which is great


Yep,  and having to shell out 15% of your revenue as tax means you have a lot less money to pay for content or device support compared to an equivalent business who doesn't need to charge that tax.


No, your not shelling out 15% of revenue, the price Lightbox charges is inclusive of GST, so regardless of this discussion the revenue is unchanged. The Lightbox price, as with any NZ product is revenue plus 15% tax. Thats a constant in NZ. As with any business, prices are based on what the market will bear, and/or cost plus, and/or the ability to adjust as the competition, costs, etc, change. For some, the choice is Netflix, for others the choice is Lightbox, or any other service they like, for some, they will have more than one service. Its about content, not $1-50 GST. The $1-50 GST doesn't matter to the provider as they are just collecting that for the Govt. If the provider had a higher price due to the GST component, that won't bother a customer, as we are talking low prices for Netflix, Lightbox etc, not Sky prices.



2688 posts

Uber Geek

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  # 1261478 18-Mar-2015 10:21
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Dunnersfella:
dclegg:
foamfollower: I think NZ retailers are deluding themselves if they think that all their issues relate to the GST inequality.


Yep. I imported a turntable a couple of years ago, saving myself $250 over RRP. Add GST to that purchase and I would've still saved $180 


Interesting example, especially if you only paid $200 NZ for the turntable.
But if the turntable was worth $1000... and you'd received a 20% discount during a sale or through haggling, you'd have local warranty support.
Then if you required a transformer to deal with power incompatibilities, it would have been another interesting aspect to deal with.

I'm sure none of this applies, but sometimes the up-front savings aren't the entire story.


Some of it does apply :-)

About 6 months after receiving it, the hydraulic tone arm mechanism stopped working, and it would lower without using the hydraulic dampening it was designed to. I contacted the manufacturer for support, with support based out of Australia. They confirmed they had a service agent in Auckland, and contacted the mothership in Japan to see if they could fix it under warranty. Here is the unedited reply:-


 

In this case, you can offer him a paid service without warranty.

 

We usually do something for headphones, but for turntables, NO.

 

The customer knew the risk like this to be happened when he tried to import the turntable.

 

Buying from other countries with cheaper prices, but still want warranty, that is self-centered.

 



As it turns out, this doesn't stop me from using the turntable. I just have to be careful when manually lowering the tone arm. The guys from Aussie offered me the repair at a discount, but I deemed it not worth what it would've cost me (> $300).

So yeah. Caveat emptor.

2213 posts

Uber Geek


  # 1261498 18-Mar-2015 10:57
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I thought this whole ondemand tv thing was fuelled by exclusives and range of content, give me some "must have" reasons to subscribe to your service and I will pay the required premium

I'm not going to go and buy a McDonalds burger just because it is cheaper than a Wendy's burger if i really want that Wendy's burger

18103 posts

Uber Geek

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  # 1261924 18-Mar-2015 19:54
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Wade: I thought this whole ondemand tv thing was fuelled by exclusives and range of content, give me some "must have" reasons to subscribe to your service and I will pay the required premium

I'm not going to go and buy a McDonalds burger just because it is cheaper than a Wendy's burger if i really want that Wendy's burger


Yep, its about content. Thats all its about. Prices for SVOD are low, devices are an issue for some, but its about content

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