How not to run an industry. Netflix and the great VPN battle

The movie studios are having a tough time of it lately. Not only can they not deliver anything good to watch, the rest of the world has the audacity to progress while they just aren?t ready for it.

Unless you?re a fan of sequels, sequels of sequels or stories from children?s comics, Hollywood has been a trifle dull these past few years. With a few obvious exceptions, movies have been falling way behind TV boxsets in terms of entertainment, quality and creativity. So it?s curious to see why Hollywood would want to actively stop people buying their content.

Netflix is an awesome service. You pays your money and streams your content. It all seems fine and dandy right? Wrong. Netflix are stuck with the unenviable task of balancing the needs of their customers with the demands of the rights holders, i.e. Hollywood. Customers want content regardless of where they live and Hollywood wants to licence that content in such a way as to squeeze as much revenue out of each territory as possible.

The whole ?how not to run an industry? thing comes down to this. Netflix reduces piracy. Hollywood bemoans piracy as one of the single biggest threats to their industry. Users of Netflix want to pay for good content. Yet Hollywood doesn?t want to let them have it without ridiculous limitations attached. Can you name any other successful industry that knowingly roadblocks loyal paying customers like this and survive?

Netflix reduces piracy. Netflix reduces piracy. Netflix reduces piracy. Netflix reduces piracy.

Move with the times

The music industry had this problem not long ago. Fortunately, they are slowly, ever so slowly, embracing a global market. Products such as iTunes and Spotify are bringing music to the world with far fewer geographical restrictions than before. The music industry still has a long way to go, but at least it?s moving in the right direction.

Even the EU is proposing to get with the times and ban geo blocking (the blocking of content depending on where you live). We have had the internet for over 30 years, yet Hollywood still doesn?t get it. We are a global village now. Get with the program.

I know I?m generalising here. I use the term ?Hollywood? to include all those licence holders who want to artificially limit access to content depending on where you live.

VPN to the rescue

I use a VPN all the time. Not to overcome geo blocking but to ensure any contact between my clients and I is secure. Many Netflix users have VPNs too. A VPN allows them to access U.S. Netflix catalogues from anywhere in the world. The U.S. Netflix catalogue has huge amounts of content that isn?t available in other places. Netflix often charges non-US customers more to access the service, yet provides less content. So why would customers not want to get the best deal?

Netflix is obviously under pressure from licence holders to stop global access. The answer? No, not to check that the billing address and the location of access matches. That would be too easy. No, they instead intend to block VPNs.

Good luck with that

Blocking VPNs is, in theory, fairly straightforward. Use commercially available VPN blacklists and implement machine learning-capable firewalls to block suspicious IPs. What could possibly go wrong? What about legitimate customers who use a VPN for security? What about IPs that are accidentally blacklisted?

VPN providers also have a vested interest in thwarting this idea. Netflix access is a big draw for people who buy VPNs. Without that extra market, demand will shrink and some providers will go out of business. So the providers will do whatever they need to in order to stay one step ahead.

With regard to Netflix and their clampdown on VPN use, TorGuard has already told its users ?you don?t have to worry?. (Source)

The strategy isn?t going to work but it will generate more negative feeling for an industry that is sorely in need of good public opinion. While on the surface it appears that Netflix is paying lip service to licence holders to keep them happy, it has also incensed both customers and Net Neutrality activists.

About the only thing that is clear is that Hollywood is clinging on to all of its waning power by the fingernails and won?t let go for anybody. Carry on like that and the industry will soon fall and it won?t be the fault of pirates, VPN users or anyone outside the industry itself.