Why Netflix Can't Boot Out VPN Users
David Curry | | Jan 10, 2015 11:15 AM EST |
(Photo : Reuters) Rumors started circulating that Netflix was trying to ban VPN users, but a new stat from GlobalWebIndex puts those rumors to sleep.
Netflix reportedly started clamping down on VPN and proxy services, to make sure customers in the U.S. were the only ones watching U.S. content.
However, Netflix chief product officer Neil Hunt claimed the company is not doing anything differently, and also sent a slight jab to VPN services incapable of hiding the original DNS.
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Even though it is still unclear whether or not Netflix is adding new features to block non-U.S. users, there is some definitive proof that doing so would hurt millions of Netflix customers.
Market research firm GlobalWebIndex claims more than 30 million Netflix subscribers come from outside available markets, including 20 million in China alone. This is almost as much as the 37 million reportedly in the U.S.
In China, there is a big emphasis on using the one-month free trial on several different accounts, alongside borrowing or sharing accounts between multiple users, misrepresenting how many actual customers are buying a Netflix subscription.
Even if only 30 percent of customers outside Netflix's verified countries were paying for the service, it would still mean more than 10 million customers, something Netflix cannot simply abandon.
Netflix is in a rather awkward position; on the one hand it wants to make sure every customer - even in unavailable countries - is accounted for, but cannot share that opinion too openly with movie companies.
This is even more important due to DVD and licensing rights in other countries, potentially overriding Netflix's license in the U.S. If a streaming service in China picks up the rights for a popular U.S. show available on Netflix, it might come as a surprise when more people are using a VPN to view it on Netflix, than watch it on the streaming service in China.
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