Lex Netflix: Streaming Does Not Have to Become More Expensive

On May 15, 2022, citizens of Switzerland will vote on the new film law. The main topic of the vote is whether or not video streaming services should be required to invest four percent of their revenues into the Swiss movie industry.

Two factors determine how heavily different streaming service providers will be impacted by the proposed law. The first is the number of customers they have, and the second is how much they charge for their streaming services. Here, moneyland.ch provides an overview.

Netflix: 3.4 million users

Netflix has a leading position in Switzerland, as the moneyland.ch streaming survey (2021) shows. A high 54 percent of residents use Netflix. Other foreign streaming services have much fewer users, with Disney Plus being used by 13 percent of survey participants, and 10 percent using Amazon Prime Video.

In terms of users, those figures show that in 2021, the five most popular paid streaming services in Switzerland collectively had around six million users (table 1). With 3.4 million users, Netflix accounts for more than half of those users.

Table 1: Users per streaming service

How many of these users effectively pay for subscriptions is not clear, because some streaming plans can be used across multiple devices and some users share their login information with acquaintances. But the moneyland.ch survey does show that at least 55 percent of residents pay for at least one video streaming service. For example, 39 percent of residents use a paid Netflix subscription.

4.99 euros to 24.90 Swiss francs per month

Netflix not only has the highest number of users, but also the highest price tags, as the moneyland.ch price comparison (table 2) shows. It charges its customers up to 24.90 francs per month. The cheapest streaming services in Switzerland are Netzkino Plus and Apple TV plus at 4.99 euros and 6 francs per month respectively.

Table 2: Streaming offers Swiss customers

When comparing prices, it is important to understand that the selection of videos offered by different streaming services is not identical. Many streaming services place a strong focus on exclusive video content, so some movies are only available on Netflix, while others are only available on Disney Plus or Amazon Prime. This strategy drove Netflix’ growth, and is now mimicked by Amazon Prime Video, Apple TV, and Disney Plus.

“A low price-tag will not do much for you if the videos you want to watch are not available,” emphasizes moneyland.ch telecom expert Ralf Beyeler. “Users have to choose between paying the price being asked, and completely foregoing the series or movies on offer. The only alternative is to watch the content with an acquaintance who has a paid subscription.”

Lex Netflix could generate millions

User numbers and price information shows that lawmakers are justified in referring to the new law as the Lex Netflix. The four percent of revenues which streaming services will be required to invest in Swiss productions will be most visible in the case of Netflix. The streaming service does not disclose any information about the revenues it generates in Switzerland. But if we assume that just half of the 3.4 million Netflix users in Switzerland pay for the cheapest Netflix subscription only, the company would generate annual revenues of around 240 million francs in Switzerland alone. Four percent of that would be nearly 10 million francs.

By comparison, if half of the Swiss consumers who use Disney Plus, the second most popular streaming service in Switzerland, pay for subscriptions, revenues generated from fees would come to around 64 million francs. Four percent of that would be 2.6 million francs.

The Federal Office of Culture estimates that a total of 18 million francs in additional funding will flow into Swiss video productions and co-productions if the law is accepted.

Will prices go up?

Opponents of the proposed law have voiced concerns that the Lex Netflix will result in a price hike for streaming subscription fees. Streaming service providers have not confirmed this, but they have been lobbying against the new law since 2021.

“The big streaming services like Netflix would not be forced to raise their prices,” states moneyland.ch CEO Benjamin Manz. Foreign service providers already charge Swiss consumers much more than they charge their customers in other countries. And unlike companies with physical operations in Switzerland, they cannot justify the higher price tags with higher operating costs. Consumers in Germany pay between 7.99 and 17.99 euros for Netflix subscriptions (see table 3). So Swiss Netflix users pay around 40 percent more than German customers. Compared to US users, Swiss Netflix customers pay around 30 percent more. “Netflix could easily afford to pay the four percent,” says Manz.

Table 3: Netflix prices by country

Over the past years, streaming service providers have continually raised their prices in Switzerland. “It is perfectly likely that streaming prices will continue to go up,” says telecom expert Ralf Beyeler. But whether or not the Lex Netflix will have anything to do with that is questionable. We have seen streaming subscription price tags go up in other countries too over the past years – including in countries bordering Switzerland. It is also worth noting that in countries which already require service providers to invest in local productions – France, for example – the prices of Netflix subscriptions are much lower than they are in Switzerland.

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