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Netflix’s liberal VPN policies are not entirely voluntary, executive admits

Wed 13 Jan 2016

Global streaming behemoth Netflix has earned reputation points with customers in recent years for its non-judgemental approach to customers’ use of Virtual Private Network (VPN) software to circumvent the region-locking of its content in various countries. In fact the company has now admitted that blocking VPNs as policy might be impossible in any case.

Netflix’s chief product officer Neil Hunt has admitted in an interview that although Netflix does use industry standard technologies to limit the use of proxies, there is no magic solution to VPN geography spoofing. “Since the goal of the proxy guys is to hide the source it’s not obvious how to make that work well.” says Hunt. “It’s likely to always be a cat-and-mouse game. [We] continue to rely on blacklists of VPN exit points maintained by companies that make it their job. Once [VPN providers] are on the blacklist, it’s trivial for them to move to a new IP address and evade.”

This has just become a critical issue for the company; on 6th of January Netflix added 130 countries to its consumer portfolio, and it hasn’t given up on establishing a Chinese presence yet either.

Ned Beatty explains the world of business to Peter Finch in 'Network' (1976)Also read: Netflix Vs. the 20th century

“Netflix is meddling with the primal forces of nature this year, ironically by trying to abolish nations. Where’s your money?”

At CES 2015 just over a year ago, Hunt delighted his consumer-base by refuting prior rumours that the company would begin to crack down harder on subscribers who use VPNs to fake their geographic location, stating “People who are using a VPN to access our service from outside of the area will find that it still works exactly as it has always done.”

The language was neutral in terms of how Netflix feels about the practice, which is, to be sure, conflicted. If it instituted more rigid geographic protection of licensed shows, it would have more – possibly even cheaper – high-quality content to attract new customers and maintain its current position as the leading streamer and subscription-based content producer, since content licensers would have greater confidence, justified or not, that they are retaining control over distribution.

On the other hand truly effective geo-blocking would cost Netflix a worryingly unknown proportion of the existing user-base which has brought it to its current prominence. Prior to Netflix’s official presence in Australia, over 200,000 Australians were unofficially estimated to be using the service via VPNs.

In any case several months later Netflix users restarted the rumour-mill upon the publication of new terms of service for subscribers, which added stipulations aimed specifically at VPN users:

‘You may view a movie or TV show through the Netflix service primarily within the country in which you have established your account and only in geographic locations where we offer our service and have licensed such movie or TV show. The content that may be available to watch will vary by geographic location. Netflix will use technologies to verify your geographic location.’

But Netflix is pushing a different long term notion of the future of content streaming, one which is not really technological in nature: the end of regional licensing. If content licensers are faint at the thought, they’re also intrigued by statistics which indicate that Torrent-based piracy drops quite radically wherever Netflix lands. Hunt says:

“When we have global rights, there’s a significant reduction in piracy pressure on that content. If a major title goes out in the U.S. but not in Europe, it’s definitely pirated in Europe, much more than it is if it’s released simultaneously.”

Since Netflix subscribers pay for the service by geographically-linked credit or debit cards, the company – unlikely to believe that such a large percentage of its user-base is constantly itinerant or in migration – can presumably make a very accurate guess as to the number of customers who are using VPNs. And even if Hunt claims that VPN providers switch IP addresses so often as to make rigid enforcement impossible, it is notable that some of the most long-standing VPN IPs are never refused by Netflix, even though challenged by many other routing entities throughout the world, such as CloudFlare.


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