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Netflix Vs. the 20th century

Fri 15 Jan 2016

Ned Beatty explains the world of business to Peter Finch in 'Network' (1976)

Yesterday Netflix announced that it is going to be more proactive about blocking VPN users – though it prefers the term ‘proxy’ – from gaining access to the content catalogues of other countries. So if you are a Netflix subscriber in any of the 190 countries that Netflix operates in, and you use proxies to watch Netflix content that is not supposed to be available to your region, apparently the game is up.

There are so many possible futures emerging from this momentous week for the company, wherein it added 130 countries to its global coverage and has now threatened a popular practice it knows underpins its entire business model, that it’s worth a look at the various possible forks leading away from the current internet furore about the news.

Can Netflix detect your VPN in order to block it?

Netflix has no magic tool to determine if you’re using a proxy or not, as chief product officer Neil Hunt admitted in an interview last week. What it does have is the geographical association of your credit card. If, based on the IP address used to log into your account, it sees your New York-based behind zipping all over the world weekly in a manner which makes James Bond look like a shut-in, it can make an intelligent guess that you’re using a VPN to traverse content-licensing regions.

Here’s a truth which no-one at Netflix has admitted, but which must be manifest now to anyone who has used a VPN to regularly access Netflix and surf on the web: the company already knew about those hoary old VPN IP addresses so many were using to log in. Hell, everyone else knew – CloudFlare challenged you while you were using it, Google search made you type in Captchas to continue…all because these dusty IPs were known to be in use by VPN providers in their thousands – or hundreds of thousands.

But Netflix never blacklisted those IPs, because letting users circumvent regional licensing was a core plank of its business model, and a central feature of its global crusade towards the abolition of regional licensing – something which Sony knew a long time ago, and which it rightly guessed was common knowledge among other studios.

Now it is indeed beginning to blacklist these ‘old favourites’. Whether or not the blacklisting will prove a ‘token ban’ on the most frequent offenders or a genuinely concerted effort depends on how Netflix decides to move through that rock and that hard place,

We can expect the VPN providers to fight back with new IPs and techniques, and indeed I believe that this is what Netflix is hoping will happen, so it can show its irate regionally-obsessed content providers that it ‘tried’ without undermining its economic model.

How serious is Netflix about shepherding us back to our own countries?

The company’s new statement of policy about VPN use reflects its typical lack of enthusiasm when being bullied by regional-licensing magnates into stricter safeguards against VPN use. The post reiterates Netflix’s long-term commitment to the abolition or at least massive diminution of regional licensing blockades, whilst paying the company’s customary grudging lip-service to its large-scale entertainment clients.

If Netflix were to decide to capitulate completely to the licensers – which is effectively a suicidal leap for the company – it would surely change its ‘multiple users’ feature, whereby for a few dollars more you can donate logins to your friends and family – or anyone you like. Or just create 2-3 extra profiles which accord with different VPN-country use, and use them yourself.

Offering a slightly cheaper account which mimics Amazon Prime’s and allows no additional concurrent viewers and abolishing multi-user accounts would make VPN profiling even easier for the company. But it would require Netflix to change its policy to match what the BBC enforces about iPlayer: if you’re not in the country you’re from, tough. On holiday? Read a book.

Netflix could alternately make specific VPN-IP provision of its own on a per-country basis – ‘approved’ proxies for holiday makers and business travellers.

But I don’t believe Netflix wants to do any of this. The company has been reliant on the lack of technical apprehension of its major entertainment clients to date. But the major studios have enough money to hire third parties who do understand the problem, and who wouldn’t be fobbed off with all this mani pulite nonsense. So if a consortium or other assembly of studios is planning on making in-house sentries a condition of content licensing, Netflix are in an interesting and challenging position.

This is the same battle between content licensers and consumers that hallmarked consumer ire over the five-region DVD zoning system 15 years ago, and Netflix is currently wincing as the studios bang their collective shoe on the table. If the company’s promise to genuinely invigilate users’ IP addresses is more than a sop to the lawyers, and if the studios would rather return to fighting piracy by lobbying governments to play whack-a-mole with torrent sites, there could be a lot of bottle episodes in season three of Jessica Jones. Netflix is meddling with the primal forces of nature this year, ironically by trying to abolish nations. Where’s your money?

https://www.youtube.com/watch?v=NKkRDMil0bw

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business feature Netflix
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