Netflix's VPN crackdown is a costly mistake

Netflix’s VPN crackdown may be a costly mistake

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About three years ago, Kevin Spacey stood in front of an audience of TV channel bigwigs and media in London and told them established entertainment models were changing.

Spacey was speaking about the success of Netflix’s series House Of Cards – in which he plays the starring role – and how it had revealed that a studio could make a hit series without conforming to the conventional rubric laid down by TV networks. Instead of pitching a pilot, waiting for audience numbers and broadcasting episodes on a week-by-week basis, Netflix had decided to release the entire first season onto its platform at once and this strategy had met with massive success.

This strategy, Spacey said, had proven that audiences wanted more control.

“Through this new form of distribution we have demonstrated that we have learned the lesson that the music industry didn’t learn,” said Spacey. “Give people what they want, when they want it, in the form they want it in, at a reasonable price and they’ll more likely pay for it rather than steal it.”

Spacey wasn’t wrong; over the next two years, Netflix added subscribers by the truckload and took a sizeable bite out of piracy while it was at it. This state of affairs, however, looks set to change, ironically because Netflix has just taken steps to ensure its audience now has less control than before.

In January of this year, Netflix announced its intentions to crack down on subscribers who were using Virtual Private Networks (VPNs) to access its service. This meant that any users who were using geo-blockers or proxies to access content available to subscribers in the US or UK, whose catalogues dwarfed the one available to them in their local region, would now have their access curtailed.

Netflix had reportedly been under pressure for a while from content creators to enforce a block of this kind. The streaming media service is beholden to the networks and film studios whose content it provides to subscribers – many of which have voiced concerns over broadcasting deals that were inked long before Netflix came into existence. If Netflix doesn’t move to block geo-blockers and proxies, it runs the risk of violating exclusivity deals in different regions.

That having been said, tons of users have been accessing Netflix through VPNs, and not just because it makes data more secure. With a VPN, subscribers have access to not just the catalogue Netflix provides for their specific region – they have access to pretty much every TV show and film in the service’s global platform.

Now, it’s true that doing this isn’t exactly on the up and up. Netflix’s terms and conditions on using VPNs with regards to accessing catalogues that aren’t in your region are pretty clear – you’re not allowed to do it. But then, it’s not exactly fair that Netflix charges users a flat rate across all regions and then offers more content in some than others. In South Africa, subscribers can pay from around R155 a month to use Netflix (sometimes more depending on the fluctuating rand), and yet when the service launched, they could access only a tenth of the content available to subscribers in the US.

Netflix has added more content since then – and its stated aim is to eventually make all content available to all regions – but it still has a way to go to bring South Africa’s catalogue up to par with that of our American cousins. In the meantime it’s announced no plans to offer a price cut to subscribers in regions where less content is available, which naturally, has led to a lot of consumers become irate.

This is a problem for Netflix and not least because many customers may cancel their subscriptions due to having content they’re used to accessing blocked. A lot of customers – who currently are very vocal about their grievances on online forums such as Reddit – are of the opinion that Netflix is behaving in bad faith. While there is no hard data on the amount of subscribers who have been using VPNs to access Netflix, many VPN service providers bank part of their appeal on accessing all of Netflix’s content, according to Wired.

Furthermore, it’s an open secret that there are some Netflix users who use VPNs to access the service from countries where the service hasn’t been officially launched yet. Netflix’s decision to block content to these region will seriously hamper its growth rate as users turn to local alternatives – such as ShowMax and OnTapTV.

Perhaps the most detrimental effect Netflix’s geo-blocker crackdown could have is that many consumers may simply turn to piracy to obtain the content they want to watch. Why jump through hoops with a VPN or pay for a substandard service when you can simply steal what you want? One could argue the moral case for not doing this but that contract doesn’t exist between consumers and corporations in the online world. Ironically, Netflix’s compliance with its content providers over VPNs and licensing agreements may return many audience members to the bandit country of yesteryear.

As Kevin Spacey, said audiences want control. They want what they want, when they want it, in the form they want it in and at a reasonable price. Netflix, after offering a taste of that control is now – for reasons consumers couldn’t give a toss about – trying to remove it.

Good luck with that. It’s not going to end well.