News & Analysis

Netflix to crack down on subscribers using proxy servers and VPNs to access overseas catalogues

- January 15, 2016 2 MIN READ

Netflix has come out swinging at those who use proxy servers and virtual private networks (VPNs) to gain access to overseas catalogues and watch content that is unavailable on their own local platform, a practice that gets Netflix into trouble with television and movie studios and distributors.

According to figures released by UK research firm Global Web Index in 2015, up to 29 percent of VPN users were using such services to gain access to a foreign Netflix platform, with a significant number of users coming from markets where Netflix was not yet active at all. This figure translates to tens of millions of viewers globally, with an estimated 20 million in China alone.

The practice was widespread before Netflix launched in Australia, with viewers using VPNs to buy subscriptions through an overseas version of the platform. With the service now having to contend with the likes of Stan and Presto for content, has continued to thrive.

David Fullagar, vice president of content delivery architecture at Netflix, wrote in a blog post published overnight, “If all of our content were globally available, there wouldn’t be a reason for members to use proxies or ‘unblockers’ to fool our systems into thinking they’re in a different country than they’re actually in.”

He stated that while the company, now active in 190 countries around the world, is one day hoping to make all content globally available, “in the meantime, we will continue to respect and enforce content licensing by geographic location.”

Netflix will do this by blocking proxies, making available to those using such technology only the content library from the country they’re currently in.

With Australian users fond of VPNs, it will be interesting to see what kind of effect this news will have on Netflix’s local figures, or whether it will have any effect at all. The service was declared to have won the local streaming war as early as June last year, just a few months after its launch, with over 1 million users (meaning the number of people with access to the platform, rather than the number of subscriber accounts).

This was ten times more than Stan and Presto, according to figures from Roy Morgan Research. At the time, Netflix had 1.039 million users, while Presto had 97,000, Stan sat on 91,000, and Quickflix lagging further behind on 41,000. Netflix has over 70 million paying subscribers globally.

The announcement comes just days after Netflix launched in 130 new markets, more than double the 60 it had reached in 2015.

Netflix founder and CEO Reed Hastings announced the expansion at the Consumer Electronics Show in Las Vegas last week, where he delivered a keynote address declaring the expansion as the first steps towards “the birth of a global TV network”.

Image: Netflix CEO Reed Hastings. Source: TechnoBuffalo.