Hollywood studios call on Netflix to maintain VPN crackdown

Lobbyists for Hollywood studios have called on Netflix to keep cracking down on proxy access to its US service after some virtual private network providers said they had already found ways around its clampdown.

On January 15 Netflix surprised thousands of Australians who use VPNs – or servers that facilitate access to internet content not available locally – to subscribe to its US service, by announcing that it would begin to block customers streaming shows that weren't officially available in their country.

Why Netflix is cracking down on VPNs

After its international launch, Netflix is turning the screws on customers using virtual private networks and geo-blockers to sign up for US Netflix accounts.

The move followed continual pressure on the US$64 billion ($91.4 billion) video streaming giant from Hollywood studios that had not licensed their content to it for those territories.

Some VPN providers have moved quickly to find a way around the block with some claiming they can continue to obstruct Netflix's attempts to stop Australians viewing its US library of movies and TV series (which is larger than the Australian library).

The Australian Subscription Television and Radio Association (ASTRA), which represents Netflix's rival Foxtel as well as 25 independently owned content studios including Disney, the BBC, Viacom and Universal, told Fairfax Media that Netflix had a responsibility to keep up the fight in the face of technical resistance.

Netflix was the best performing major US stock in 2015 but is under pressure to grow even faster overseas as its US ...
Netflix was the best performing major US stock in 2015 but is under pressure to grow even faster overseas as its US growth has slowed. Photo: Andrew Harrer

"If providers of VPNs want to play 'cat and mouse' then Netflix should be keep playing cat to protect rights holders' rights," Andrew Maiden, ASTRA chief executive said. 

"Netflix is entitled to crack down on viewers who circumvent geographical blocks. Film studios license streaming services to sell their programs in particular geographic markets. If streaming services turn a blind eye to abuse, they're effectively giving away someone else's property. That wouldn't be right in any other industry and it's not right here," Mr Maiden said.

"Whether you agree or disagree with geoblocking is not the point. Right now it's how film studios choose to sell their assets. One day technology might end up forcing that approach to change, but until it does studios have the right to enforce their contracts and streaming companies have an obligation to police their rights deals."

Foxtel's cable and satellite service is under pressure from the growth of Netflix, whose Australian service analysts and industry experts estimate has at least five times as many active users as its closest local rival Stan, which is owned by Fairfax Media and Nine Entertainment Co, and celebrates its first birthday on Australia Day.

Netflix was the best performing major US stock in 2015 (up 134 per cent) but is under pressure to grow even faster overseas as its US growth has slowed.

Its crackdown on VPNs came less than 10 days after it launched its service globally on January 6: simultaneously bringing its internet TV network officially to more than 130 new countries around the world in a typically massive splash at the Consumer Electronics Show in Las Vegas.
 

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