VPN Articles and News

Netflix To Ban VPNs?

By Paul Liu
Friday, October 24th, 2014

According to reports published by CNET and Torrentfreak, Netflix is under pressure from copyright holders to block users from accessing the service through a VPN. The reports state that AHEDA (Australian Home Entertainment Distributors Association), the group representing major studios like Warner, Universal, Twentieth Century Fox and Sony Pictures in Australia; is lobbying with the streaming service provider to close the loophole that allows non-US residents to watch movies and TV shows online simply by changing their IP address through a VPN or Smart DNS service.

Why Copyright Holders Are Against VPNs?

If you are scratching your head as to why copyright holders are fighting so hard to get VPNs banned, you need to understand how broadcasting rights for TV shows and live events are sold in the first place. It is a common practice in the entertainment industry to sell broadcasting rights by countries or geographical regions. So it is entirely possible that the channel or studio having broadcasting rights for a particular TV show in United States is not allowed to broadcast the show outside the country. The rights for the show outside US may be held by a rival channel or studio and it is bound to lose viewership and advertising revenues when people watch the same show on Netflix through VPNs. It is estimated that as many as 200,000 people from Australia access Netflix through a VPN even though the streaming service is not yet officially available in the country. The use of VPNs also affects the fortunes of local streaming service providers like Quickflix since people prefer Netflix due to its amazing content library.

Is It Really Possible For Netflix To Block VPNs?

It is indeed possible for streaming service providers like Netflix to ban VPN and Smart DNS users from accessing the service. Hulu did something similar few months back by blocking IP addresses of major VPN providers so it became very difficult to access the service from outside US. However, Netflix also needs to keep in mind that the VPN ban would also affect US expats and tourists who are located outside the country but wish to watch the latest episodes of their favorite TV shows. The move could also affect Netflix’s bottom-line significantly since everyone who is accessing the service through a VPN also happens to be its legitimate customer who is paying for the service.

If Netflix decides to ban VPNs, it could also lead to increase in online piracy. Since there are plenty of websites offering latest movies and TV shows, viewers outside America may decide not to sign up for a local streaming service at all and choose to watch their favorite shows through torrents or third party services instead. This would mean a revenue loss not only for Netflix but also for local channels and studios. And let’s not forget that it is quite easy for tech savvy users to setup their own VPN service by renting a VPS server in United States. This would essentially defeat the VPN ban since it is not possible for Netflix (or any other service provider) to monitor or block each and every IP address or user. So while it is possible for Netflix to ban VPNs, it would not prevent people from accessing their favorite shows from outside US.