Since this spring, online streaming service Netflix has actively started blocking users of all major VPN providers from watching their content. This blanket ban was met with an understandably negative backlash from customers, many pointing out that Netflix was now forcing them to put their security and privacy at risk to use their service. The question is, why are they doing this?
Netflix simply caved under pressure from copyright holders (U.S TV networks and Hollywood studios), who operate with an outdated business model of selling distribution rights. Back in the day, only a handful of U.S networks and movie studios had the budgets and capability to make and market blockbuster entertainment. What made a successful show a goldmine for a network was not only domestic revenue, but the fact that it could be sold separately to TV networks in almost every country in the world.
This is because the market was fragmented, and people could only watch the show or movie on the one channel in their country that bought exclusive rights to it. Fast forward into the age of broadband, all this seems like ancient history. The change has been fast, as TV viewing among the age group 16-26 has dropped 25% since 2010. Even older generation X viewers aged 35-44 showed a 17% drop in watching traditional television. It’s clear that consumers of today want to watch their entertainment online, and they aren’t too happy about artificial borders being built on the internet.
Major industries reacting slowly to the digital revolution is nothing new, but content owners trying to get the best of both the golden age of TV (being able to sell content many times to different markets) and the convenience of an online streaming service is a just them having their cake and eating it too. It just doesn’t compute to watch your favorite TV show online, and then hop over a border and suddenly being blocked from seeing it.
Being kind of a jerk to your customers is one thing, but forcing them to risk their privacy and security to watch a TV show is unacceptable. Netflix has seemingly forgotten that a VPN is so much more than a way to appear as if you were in another country.
For instance, our own Freedome VPN encrypts your connection, blocks advertisers from tracking you as well as protects you from malicious websites. Blocking VPN on your service because it also lets people get around geo-blocks is like banning sunblock on a beach because there will be stains on your sand.
There are many players who share responsibility over this mess, but sadly it’s the privacy of end users that suffers. Netflix is between a rock and a hard place, but forcing their users to give up privacy to please those who produce their content should not be the way to go.