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Netflix Decides To Crack Down On VPN Users (netflix.com) 249

An anonymous reader writes: Netflix have announced they'll be taking further steps to ensure users are not circumventing geo-restrictions. David Fullagar, Vice President of Content Delivery and Architecture at Netflix says "Some members use proxies or "unblockers" to access titles available outside their territory. To address this, we employ the same or similar measures other firms do. This technology continues to evolve and we are evolving with it. That means in coming weeks, those using proxies and unblockers will only be able to access the service in the country where they currently are. This announcement comes just days after Netflix Chief Product Officer Neil Hunt said that a VPN blocking policy might be impossible to enforce."
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Netflix Decides To Crack Down On VPN Users

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  • Cloudflare (Score:4, Interesting)

    by Anonymous Coward on Friday January 15, 2016 @06:37AM (#51305813)

    This reminds me of the poor Tor users who are met with Cloudflare pages for a large part of the net.

  • Prediction (Score:4, Interesting)

    by Ost99 ( 101831 ) on Friday January 15, 2016 @06:47AM (#51305847)
    Netflix will play cat and mouse with the unblocking services for 3 months, then give up and point to their initial statement - it is not possible to enforce.
    • But I sincerely hope their clients have given up on Netflix by that time as well.
      • As long as a streaming service does not allow me to stream what ever content they have in what ever country, I only pick it if it is extremely cheap.

        I don't want to be unable to see german stuff, just because I'm on a trip in Paris, Rome, Amsterdam, London, Copenhaven ... you get it.

        Europe has lots of countries and plenty of people spent significant time in hotels outside of their country.

        Also: I prefer to watch certain stuff in the original version, e.g. in english (US) or japanese or french: even when I'm

        • by ldobehardcore ( 1738858 ) <steven,dubois&gmail,com> on Friday January 15, 2016 @07:27AM (#51305975)
          They think that geographic segregation can benefit them because they still think that it takes half a year by sea to get from England to America. The studio executives are fucking ancient morons who need to just die already. Let younger people who actually understand the world step up and have their time to actually manage the businesses correctly from a temporal perspective less than 200 years old.
          • The result is: many lost customers somehow suddenly have a burned DVD shipped from a friend in the US to Europe or Asia, or they get the original version as a gift because the owner has watched it and don't want to keep it.

            Surprisingly the number of people who rather see the english/US original of a series than wait for a localized version is quite high(and it is unknown if there ever will be a localized version, is there a danish version of Walking Dead, e.g.?).

            I for my part I'm pretty fed up that everyone

      • by DarkOx ( 621550 )

        I would say don't hate the player, hate the game. Netfix would not be able to license a lot of content unless they agreed to do the geo-blocking.

        Your beef should really be with the studios. You can argue that refusing to support Netflix (which I would say has probably done more to bring down the cost and increase the availability of content than anyone else) cuts a distribution outlet for the studios and production houses. That is true but you had better be willing to stick to your guns and not turn arou

        • However, Netflix probably has to pay more to license stuff for global streaming. It makes little sense for them to pay extra licenssing feese for the ability to stream French Canadian comedies to Norway if they think that only a very small percertage of the users win Norway will benefit from having that content available. Sure you could argue that just about every country would probably benefit from having hollywood blockbusters, as they are in high demand. But Netflix only has so much money to spend on li

    • by Z00L00K ( 682162 )

      The day when the CEO of some major company involved gets blocked based on being behind a proxy it will start to rot down to nothing - or if too many random people gets blocked because Netflix has detected a proxy on their IP - then it will be an outrage.

    • by Dunbal ( 464142 ) *

      The very instant they block my VPN access (I live in Panama but I don't want to see fucking "LATAM" content full of un-necessary subtitles, fucking Chavo del 8 and Colombian/Venezuelan soap operas since I am a Canadian living in PTY) is the very instant I cancel my monthly sub.

      See now if the industry was REALLY smart they would have the regions as subscriber "channels" and let you choose which region's content you wish to be subscribed to.

      • Re:Prediction (Score:5, Insightful)

        by Ramze ( 640788 ) on Friday January 15, 2016 @08:33AM (#51306169)

        IP rights are extremely complicated in the entertainment industry -- especially for older works where all parties didn't decide up-front what residuals would be from "streaming media" which didn't exist at the time of filming. Writers guilds, actor's guilds, and each and every person listed in the credits can get involved with how much they should get paid for what region, how, and when the film or tv show is aired. A lot of actors, writers, and directors want a cut of residuals as well as a paycheck up front. I have friends that are extras in lots of tv shows and movies and occasionally get paid bit parts. They get nothing when someone airs something they were in as an extra, but the bit parts -- if they're in the credits, they get a check every single time some network plays a movie they were in. They're called "residuals" and you better believe they're a complicated mess when 10 years down the line the production company wants to change the rules on distribution to include Netflix an/or a new country. How many phone calls are made to find each and every person in the credits for a work -- including "local jerk #3" to renegotiate his contract 10 years later? Have you seen how many names scroll by at the end of movies?!?!? Sure, for new works it's easier b/c they try to include future tech in the contracts, but it's crazy to expect a lot of entertainment producers to do the work to get the rights to distribute their own works through a different distribution channel than their contract allows.

        I'm astonished Netflix even bothered going with so many countries for programming when just the USA and Canada was a nightmare to work out. They've probably been in talks for years to get approvals for other countries. The VPN/proxy ban was probably part of that discussion.

        Netfix is not to blame, but the content providers themselves may not be to blame either -- they're bound by a lot of contracts, too. Follow the money if you want to know where this comes from. Lots of actors get X up front, a percent of domestic, and a percent of global through DVD, Bluray, theaters, syndication on TV networks, and many also have Netflix/Hulu/streaming percentages as well. The US Tax code is probably less complicated.

        • by Dunbal ( 464142 ) *

          IP rights are extremely complicated in the entertainment industry

          No, it is extremely simple. All the parties you mention are forgetting one thing. The customer is the one who pays. The customer is the boss. I vote with my wallet and my wallet says that if I can't get access to US content then I don't want access. Period. This is entertainment (and bad entertainment nowadays at that), not life support. At some point it becomes far less complicated to read a book or play a computer game instead of struggling for the privilege of watching some show or other.

          • by Kjella ( 173770 )

            No, it is extremely simple. All the parties you mention are forgetting one thing. The customer is the one who pays. The customer is the boss. I vote with my wallet and my wallet says that if I can't get access to US content then I don't want access. Period.

            So if I've written a library using GPL code and a company wants to buy it to use in their proprietary application I'm just supposed to "forget" that I don't have the rights to do that? Sorry, you chase down every person in the credits and get permission. Voting with your wallet just means from the choices offered or to walk away, not dictate reality.

        • Canada is still a nightmare - Netflix.ca has got jack shit to view. The only way to make netflix useful in Canada is by way of proxies to access American Netflix. Otherwise, it's a waste of money.
        • by EvilSS ( 557649 )
          There are also international distribution deals involved a lot of times, where the studio will sell distribution rights in certain countries to local distributors/studios/broadcasters there. This is one reason why region locking is a thing on DVDs and to a lesser extent blu-rays (and I'm absolutely astonished that they agreed to drop it completely for UHD Blu-rays). It's really a mess because no one in the industry had the foresight to see any of the streaming stuff coming, so it's been just in the past few
        • IP rights are extremely complicated in the entertainment industry -- especially for older works where all parties didn't decide up-front what residuals would be from "streaming media" which didn't exist at the time of filming. [...]

          This is moot, this affects the media companies' entire back catalog, and in practice they have repeatedly been demonstrated to often make no effort to make payments of owed residuals for older works, even domestically, and even in the case where the contracts provides terms. The media companies have financial incentive to license their back catalog (i.e. profit) for distribution in alternative mediums whether videotape, DVD/BD, streaming, or merchandising of an old brand / image, so it's hard to feel sorry

  • by lesincompetent ( 2836253 ) on Friday January 15, 2016 @06:50AM (#51305855)
    One step forward, two steps back.
    Back to ThePirateBay.
    • by Dunbal ( 464142 ) *
      But TPB has been taken down! It's offline! Oh wait...
      • Exactly. Netfix exclusive/produced content, assuming they take these complications into consideration in the first place, gets a leg up over the traditional content while the industry fights to shove genies back in bottles.

        A recommendation: Kodi with add-ons is easier for the non-techies - and streaming MAY (IANAL) be less legally exposing than outright torrenting. The industry needs to realize that this is the next frontier they are competing with, and the geo-restrictions are a hurdle consumers will work

        • by Dunbal ( 464142 ) *

          if I pay the same as a US subscriber, why should I not have the same access?

          And the access problem is a serious one. People who live outside the US probably don't understand it at all. Since I do, I can explain it:

          Companies are lazy and stupid and always pick the lowest hanging fruit. Therefore when a company say like Netflix wants to go regional, they say ok, let's divide the world into regions: Europe, Latam & Caribbean, Asia, etc. Then they farm out the work to regional offices. As far as Latam goes, this is usually Mexico. So lo and behold, what does the Mexican office pr

  • by gweihir ( 88907 ) on Friday January 15, 2016 @07:04AM (#51305913)

    Or maybe not so smart, because then they pay nothing. This way the pay for the content. Partitioning the world for the purpose of selling content separately is just artificial scarcity and, at best, an anti-capitalist thing to do.

    • by Dunbal ( 464142 ) *
      I would also like to hear the lawyer in a 3rd world country successfully argue how much the plaintiff was "damaged" when you downloaded and viewed content that is not actually available in the region, too.
  • What good do regions do to any business strategy?

    Users pay to watch content and the content provider gets payed. Why would any outfit make it harder for customers to purchase their products by introducing regions? This discussion is not limited to Netflix but also holds for DVDs, Blue Rays, Amazon Prime, etc...

    (I'm well aware that providers have licensed rights to representatives abroad and that that is a limiting factor. The question remains why content providers implement such ridiculous schemes.)

    • by Rob Lister ( 4174831 ) on Friday January 15, 2016 @07:32AM (#51305991)

      What good do regions do to any business strategy? Users pay to watch content and the content provider gets payed.

      The content providers are not getting paid. When content is produced, different regions buy rights to distribute that content; to sell it. As an ironic example, Hulu bought the Japanese rights to House of Cards, a Netflix Original production. Why did Netflix sell it? Because at the time they didn't do business in Japan. Now they do. So if you subscribe to Netflix Japan, you won't find House of Cards.

      So Hulu is understandably miffed if a Japanese consumer VPNs into the U.S. Netflix to watch House of Cards. Netflix is getting payed for content owned by Hulu.

      • Except the Japanese customer VPNing into US Netflix to watch House of Cards won't have Japanese dubbing or subtitles available or access to other Japanese shows on Hulu. If they then end up subscribing to both, then nobody loses. Tim
    • Re: (Score:3, Interesting)

      The idea is: People in, say, sub-saharan Africa have less money and less disposable income, so they can price their product cheaper there and make up for it in volume. While people in, say, the US have a lot more disposable income and can withstand paying twice or three times as much as those in SSA.

      The problem with this model is that Americans know that if the company is selling it cheaper elsewhere they're still definitely making a profit there, and price discrimination based on geography is bullshit
      • by Bert64 ( 520050 )

        And prices in sub saharan africa (and asia etc) are not lower because people there can't afford more, they're lower because there is a lot more competition from pirate copies in those locations and charging the same as other countries would result in zero sales.
        If there was no piracy, they would charge the same price.

        • Whatever. The important point is that they charge less elsewhere while still making a profit, and the internet renders such practices transparently bullshit. The companies need to compete globally or fucking get out of the game.
        • by DarkOx ( 621550 )

          I am not sure I am buying that one. With a traditional product certainly. The trouble is with media the variable costs per unit are near zero. So some of the traditional rules around the economics of selling get a little strange.

          If I were selling cars (hey its slashdot) its probably the case that I can get my unit cost of production down lower building 50,000 of them rather than 10. I can charge less for each. I might attempt a price discrimination strategy to try and take market from my competition.

    • by swb ( 14022 )

      My best guess is some kind of differential pricing strategy, lowering prices somewhat for some markets as the price they extract, er, charge, in some markets is too high for all markets and they don't want people arbitraging on their own to get a discount.

      There might also be contractual terms that require them to guarantee exclusivity in a given market. If you have the rights in some small country which neither creates the content or manufactures the physical product, you might be worried about your market

      • Mod this commenter up!

        It's all about differential pricing. But the fact is, the distributors can never hide the fact that they're profiting off of people paying half as much as you are. And the only things enforcing this segregation are stupid laws written by the distributors themselves, who then paid lawmakers to pass them.

        They're trying to enforce an 18th century business model of sailing ships and ox-wagons on the internet. They must be stopped, because they're a fucking burden on the modern eco
    • by AHuxley ( 892839 )
      Re: What good do regions do to any business strategy?
      Say you have a few big cities with coax in Australia. Buy a US series and show it a lot in time with the US release date with an expensive month per month connection fee.
      Some US or UK brand then offers the same series in full HD at a low per show price on the same day via the internet.
      Who wins depends on the political access to ensure regional lock out is enforced or free trade is allowed.
    • by raymorris ( 2726007 ) on Friday January 15, 2016 @08:23AM (#51306117) Journal

      It's legacy code. It made perfect sense until a few years ago, but it now needs to be refactored. Suppose you produce a show and CBS (USA) buys the rights to air it. Obviously CBS doesn't want their competitors, such as NBC, to have the same show. So you give CBS an -exclusive- contract.

      So your show is on CBS and then the TV station in France wants to air it. CBS isn't competing in France, so they don't much care if the station in France has the same show. CBS only really cares that they have it exclusive in the United States. So that's the way contracts are written, TV networks buy exclusive rights in their country. That goes along fine for 90 years.

      After 90 years of that approach working pretty well, Netflix comes along and they want to buy the same TV shows the networks do. The production company either already has sold exclusive rights in different countries or assumes they will (they always have before). The standard model of selling rights to networks in different countries doesn't work well with Netflix, which is available from almost any country (via vpn or otherwise). Hollywood will have to adjust and right contracts differently. Probably, Netflix will have to buy WORLDWIDE rights to the shows, which will be more expensive than buying rights only in a particular service area. They'll adjust, it just takes time to overcome a century of inertia.

          Heck, the production companies are still doing something else they've done since the earliest days of TV - casting Betty White. :)

      • by havana9 ( 101033 )

        It's legacy code. It made perfect sense until a few years ago, but it now needs to be refactored. Suppose you produce a show and CBS (USA) buys the rights to air it. Obviously CBS doesn't want their competitors, such as NBC, to have the same show. So you give CBS an -exclusive- contract.

        So your show is on CBS and then the TV station in France wants to air it. CBS isn't competing in France, so they don't much care if the station in France has the same show. CBS only really cares that they have it exclusive in the United States. So that's the way contracts are written, TV networks buy exclusive rights in their country. That goes along fine for 90 years.

        Except in older times didn't work like this. Let's say you sell a show at the French television, and you sell a show at the Italian television. Beacuse UHF waves don't follow national borders, you were able to pick a French TV show in Tuscany and some part of Northern Italy and the opposite happened in France. Dual standard colour TV were easily available on both countries. There were also repeaters in Italy for the French TV, and Tele Monte Carlo had both a French speaking and an Italian speaking channel,

    • by jeremyp ( 130771 )

      The content providers don't sell to the end users, they sell to media companies. If you're, say, Channel 5 in the UK and you buy the latest hot American TV show, you'll probably not be screening it for several months. In fact, in some cases you might be broadcasting more than a year after the air date in the USA. If the same show has been made available on Netflix in the UK at the same time as in the US, your viewing figures are going to be eroded which means your advertising revenues will be reduced. Thus

    • by Ramze ( 640788 )

      Business 101 -- try to extract the most money possible from each customer. This works best when you segregate customers. IE -- get the rich guy to pay more if you can.

      Give you an example:

      A lot of college books sold in the USA are hardback books that cost upwards of $75. (sometimes as high as $125). You can get a used one for cheaper... OR you can find a paperback "international version" online that's being used in India. Same book, just paperback vs hardback and a slightly different title. Sometime

  • by Rosco P. Coltrane ( 209368 ) on Friday January 15, 2016 @07:14AM (#51305935)

    Their business model is so screwed up. I mean, no other industry responds to potential customers abroad willing to buy their stuff by making it extra hard for them to do so.

    • Their business model is so screwed up. I mean, no other industry responds to potential customers abroad willing to buy their stuff by making it extra hard for them to do so.

      Mainstream video gaming treats all customers like criminals. I'd say that's worse.

    • It's not Netflix, really. It's the production houses. Netflix licenses content from publishers, and the publishers impose restrictions upon where that content can be shown. Often this is because the publisher already has an exclusive arrangement with a streaming service somewhere, and cannot allow another streaming service to carry it.

      It's similar to local blackouts in sports. The sports league sells the TV rights to a media company with the restriction that the content cannot be shown in the markets local

  • Given the story a few days back, did anyone not see this coming?

  • "Some members take the effort to find VPNs so that they can use our service even more, and we obviously don't care very much for that." If it is indeed the content providers, why can't Netflix stand up to them?
    • by garyok ( 218493 )

      If it is indeed the content providers, why can't Netflix stand up to them?

      Because the content providers are effectively operating as a cartel. Maybe not formally, but you can guarantee they're talking to each other, sneaking a look at each other's contracts, and making sure their licensing terms don't diverge too far. It is very much in the content providers' interests to make sure they can still apply pricing discrimination between markets so they can maximise their profits and not have Netflix cannibalise all their other regional sales channels (e.g. Blu-Ray/DVD sales) too. Wha

    • by Ramze ( 640788 )

      Because it's not the content provider's faults necessarily. Writers, actors, directors, musicians all have contracts which usually spell out at length how the content provider can distribute the work. If something says it's explicitly for US distribution only with an option to discuss pricing for other regions... well... they're going to restrict its distribution to the US only -- at least unless it's worth their time to call up everyone involved in the production that has a stake in it & negotiate

    • by Xest ( 935314 )

      "why can't Netflix stand up to them?"

      Because the content providers provide the content and if Netflix has no content it ceases to exist. That's why Netflix is trying so hard to make it's own content.

      But to be honest I think I'd quit Netflix if they had reduced content. They're already incredibly expensive compared to Amazon Prime.

      It costs me £83.88 a year to have Netflix (soon to be £90) and for that I get to use Netflix on 2 devices at once and only get 1080p HD content. Compare and

  • by Chrisq ( 894406 ) on Friday January 15, 2016 @07:27AM (#51305977)
    It would pretty obviously be impossible to enforce 100%, but I would think it would be pretty easy to block the users of the major proxy services. Someone with their own private VPN woyuld probably never be detected, but 90% of the users would just give up
    • by AHuxley ( 892839 )
      If a VPN is buying a pool of shared, known VPN exit points from a 3rd party that only deals with VPNs in the US it should be easy to track and block.
      The lower end, cheaper VPN services will be easy to block if they all use the same few fast low cost networks to emerge into the USA.
      If a VPN has its own real hardware in the US? Then it can buy into any network or provider from its own more hidden hardware and exit as any US telco, providers, networks business service ip range.
      An ip range might show as a U
      • by DingerX ( 847589 )
        yeah, a US telco, where all users in an area have a latency of 20 ms to the server, except one that's always around 200. Or use this guy's tricks [medium.com].
    • Your private VPN is probably set up in a major hosting provider, like AWS or DigitalOcean, just like the major proxy services are. Netflix will just block the IPs of known hosting providers, so most private VPN's are probably SOL too.

  • People are willing to pay what they find acceptable for content. Annoying people and don't letting them access what they're paying will only make them move to other services that provide it for free and without annoyances...
  • Going after customers who jump to hoops, just to buy your product, is a great business idea.
    I just hope they have 80% of their customers on VPN.

  • Why isn't your catalog of video choices based upon your billing address, instead of your IP? They certainly know where the CC # is based out of and tie that to the video selection and boom, they don't have to care if you VPN/Proxy in.

    IMarv

  • I know quite a few people here in Canada who use US Netflix by simply manually specifying a specific DNS server.

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