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19 January 2016

Netflix’s crackdown on borderless streaming is a concession to the past

The pressure to stop customers using VPNs is likely coming from traditional TV networks and film companies, not from within Netflix itself. 

By Barbara Speed

Netflix’s selection of films and TV is pretty good, but as users are increasingly realising, it’s a lot better once you start shopping around other countries’ offerings. Netflix, like the rest of the media landscape, is ruled by a tangled web of country-specific licensing rules which dictate what can be watched where, but web services called VPNs let users get round the country-specific firewalls. But these glory days are numbered: in a blog post last week, Netflix  announced that it’ll be cracking down on VPN usage from now on. 

This could be because the practice is growing more and more common. The number of people googling “Netflix VPN” zoomed up over 2015, and more sophisticated services like Smartflix let you see, at a glance, all the films and TV on offer anywhere in the world. As a user, it’s easy to be baffled by the tangle of country-specific licenses which lead to strange omissions, such as the fact that American Sniper is listed on the Danish site, but not the American one. Breaking these seemingly arbitary rules doesn’t seem so bad. 

Even Netflix seems to agree. Until now, the site has been remarkably hands-off about VPN usage. Last year, CEO Reed Hastings said that while Netflix “does not encourage” the use of VPNs, it’s a problem that will disappear in the drive towards global licenses – by the “end of 2016”, he predicted, Netflix will serve the same fare in every country. Netflix’s original series and features – such as House of Cards and Orange is the New Black – already tend to arrive in every country at the same time. It’s also pretty hard to stop people using VPNs in the first place, he added: “It’s very hard to detect, because a VPN gets very good at covering their tracks for all the obvious reasons.” 

That’s why it’s likely that the company’s blogpost is due to pressure from Netflix’s partners. Sony emails leaked last year revealed that the studio was putting pressure on the service to enforce its country-specific licenses. The concession to these partners also suggests that global licenses might not be industry standard as soon as Hastings hoped. 

Various VPNs have already stepped forward to assure users that they’ll still work despite the crackdown, but reddit users are reporting that they have been blocked from accessing the site using VPNs. Another unwanted side effect will be the alienation of those customers who use VPNs – which essentially just block your IP address – for other, privacy-related reasons. 

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It’s also a bit of a slap in the face for the VPN providers themselves, who have been instrumental in attracting customers to Netflix in the first place. For many users, Netflix’s country-specific list of media isn’t enough on its own. As an IVPN representative told Torrent Freak:

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“Netflix has clearly benefited from VPN service providers for many years. This has helped facilitate the rapid expansion of Netflix’s worldwide customer base whilst at the same time complying with the ‘letter’ if not the ‘spirit’ of their content providers’ restrictions.”

In this way, Netflix is a victim of its own popularity: it can’t keep operating at such a high level while knowingly allowing customers to break licenses. But without the broader options this allows, perhaps customers won’t be interested anymore.