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As of the end of 2014, Netflix had more than 57 million subscribers worldwide. While well over half of those subscribers are in the U.S., the entertainment service has followers in roughly 40 countries. However, Netflix’s international numbers may undergo a change if the company follows through with what some Hollywood studios want them to do — that is, ban VPN users from accessing their content.
Will Netflix give in to the pressure? It doesn’t seem likely. Here’s why we think there is no reason to worry.
Some of Netflix’s content providers want the service to ban VPNs because of licensing rules. Basically, if Netflix subscribers in Germany or the United Kingdom — or any other country, for that matter — use a VPN to change their virtual location so they can watch a movie that is only available with Netflix U.S., the movie studio loses money.
Netflix didn’t totally ignore movie makers’ concerns. In fact, as a contributor for Forbes brings out, “Netflix now has a paragraph in its terms and conditions stating pretty clearly that the streaming giant reserves the right to cut subscribers off if it discovers they’re not accessing the Netflix service of the country they’re resident in.”
That part of Netflix’s terms and conditions has been there since last year, and we haven’t heard much noise about them enforcing it. In fact, it seems like the clause is there merely to satiate movie studios. That is because…
According to The Guardian, “More than 30 million Netflix users live in countries where the service is unavailable without the use of location-masking software.” While not all of those users pay a monthly subscription — some share a subscription with friends and family members — imagine if only half of those people pay for a basic Netflix subscription. That would equate to well over $120 million dollars lost each month.
A good portion of Netflix users in countries where it is unavailable are in China, a country notorious for its strict regulation of what its residents can and cannot do online. China is the world’s third-largest entertainment market, and Netflix would have a tough time officially stepping into the country. It doesn’t seem likely that Netflix would want to lose the share of China that they already have.
It isn’t just countries without Netflix service that will hurt the entertainment service if they crack down on VPNs. The Forbes piece mentioned earlier brings out, “when Netflix launched in Australia…it offered just 1,120 unique titles – a puny number when compared with the 7200 or so unique titles currently available on Netflix’s US service.”
Netflix titles are more abundant in the U.S., and people who live outside the U.S. who demand an equal level of content may abandon Netflix altogether if using a VPN to change virtual location is no longer an option. After all, Netflix costs roughly the same amount of money across the globe, so it seems reasonable that consumers want just as much content as the folks across the border.
Of course, because of tricky licensing issues, there are some popular titles not available in the U.S. that are available elsewhere, so even U.S. subscribers may balk if Netflix puts the kibosh on VPNs.
Being able to change virtual location through a VPN is a perk, but it isn’t the largest benefit of VPNs. VPNs are tools that protect consumer privacy when they access public Wi-Fi networks. A VPN shields sensitive data such as passwords, account numbers, and personal statistics. Because new cyber-threats are constantly emerging, it seems that anyone who discourages the use of VPNs is on the wrong side of the argument.
Netflix actively works to provide more content to people in more countries, but dealing with all the fine print is a time-consuming task. Why shouldn’t they take advantage of a more robust worldwide market in the meantime? Netflix benefits by allowing VPN access. More importantly, however, consumers who care about their privacy benefit from VPNs, and no one should frown on safer Internet usage.