A report at TorrentFreak says Netflix has begun blocking non-US based customers who use a VPN to access the US Netflix service.
In the US, Netflix is laden with content, much of which is unavailable to non US citizens due to ‘complex licensing agreements’ that see content owners charging content aggregators in non-US countries license fees to broadcast or stream that content in those countries.
Because of the Internet’s rich US heritage, streaming services took off in the US first, and US streaming companies such as Netflix were able to negotiate streaming license rights - but only to US citizens.
Those attempting to view content for US citizens only from a range of sources, not just Netflix, often see a message that along the lines of ‘this content is in your country’ or ‘this content has been geo-blocked’.
There is even content on YouTube which is available to those in the US only.
Geo-blocking or restrictions is something consumers around the world have seen for years, whether it is for DVDs, streaming music and video services, games and more.
It is also something that prevents those not in the US from accessing content meant for the US region only, and something that allows those who license content for display in non US locations to charge a different amount to that which is charged to those in the US.
So, people use VPNs or virtual private networks that allow their computers, phones, tablets and other devices to connect through the Internet to the US and appear as though their device is on qualifying US soil.
This has allowed people from around the world to enjoy the much cheaper content prices available through Netflix and other services than is charged by a local pay television service - such as Foxtel in Australia, for example.
Now, Netflix has announced it is coming to Australia in March 2015, with Foxtel, the dominant pay television platform in Australia, having launched its own Netflix-like service, dubbed Presto, which started off with a movie content library and which is introducing TV shows to Presto - at an additional cost - this year, before Netflix Australia launches.
But none of these - and certainly not Netflix Australia - will be offering the breadth and depth of content that the US version of Netflix offers.
Because Netflix has had to agree to conditions placed by those licensing content for its US-based service which decree Netflix must work to block those using VPNs to access its US library of content, there has been an expectation that Netflix would start cracking down.
This is also because Netflix is estimated to have 300,000 Australians using its service via VPN down under, and presumably hundreds of thousands if not millions more around the world doing the exact same thing.
All of those non US users would otherwise have to pay higher prices to local streaming services because local streaming companies are not only likely having to pay relatively high rates to license content, but also because they have to run an entire operation, pay employees, set up streaming services and more - all to duplicate what Netflix is already doing - and to make some kind of profit so they can stay in business.
I have friends who are using the US based Netflix service in Australia through a VPN, and after having contacted them, they report to me that their service currently remains uninterrupted, and they haven’t had any issues as yet.
However, reports are filtering in from the Internet that Netflix has begun cracking down on VPN users.
The remedy for the moment appears to be to connect to a different US location via the VPN service they are using, which then appears to restore service.
However, given Netflix has reportedly agreed to monitor and block VPN usage, it is conceivable that Netflix will play the game of ‘cat and mouse’ to make life as difficult as possible for VPN users - even though these people are very happy and paying Netflix customers.
One side effect will be for US citizens themselves who do not happen to be in the US at the moment, be it for travel, business, holidaying or something else, and who wish to enjoy their Netflix subscription, but can only do so outside of the US via VPN.
With the launch of Netflix Australia rapidly approaching its March 2015 start date, Australian and other non US users of the US Netflix service around the world will soon start to see just how fiercely Netflix will crack down on VPN users, and how easy or difficult it will be to get around Netflix’s restrictions.
At the root of it all is the money earned from broadcasting and streaming content that non US companies have paid to stream US content - or content from other countries - to their local audiences.
In a perfect world, we’d simply all be able to buy either directly from content providers, or more affordably from a content aggregator such as Netflix for a single, inexpensive monthly fee.
But that’s not how the world of content licensing has been set up over decades, with Netflix and other content aggregators being the disruptors of this lucrative business.
So… the battle for your dollars is on. Netflix would presumably love to keep as many of its international customers as possible, while doing all it can to convince content owners that it is doing all it can to serve US customers only.
There’s no easy answer for those worldwide wanting to make money from content aggregation, even if the answer for consumers is simple - just subscribe to Netflix US and pay a simple, low monthly fee.
What happens next will one day make a great TV series or set of movies all its own, but in the meantime, we’re all getting to see this movie play out live.
It won’t be neatly wrapped in up a 45 minute episode, a 22-episode series, a 2 hour movie or 9 hour trilogy - so make sure you have a popcorn maker with plenty of kernels at the ready - as this is one show that will go on for way, way longer than your standard Peter Jackson epic!