Why frustrated users are finally fleeing Netflix

It’s a tiny detail, a small oversight, a hole in the armor — and to hear some tell it, it’s the fatal flaw that could derail one of the biggest streaming powerhouses on the Internet.

That powerhouse is Netflix, of course, which accounts for more than a third of all Internet traffic. And that flaw? You can’t watch when you’re abroad.

Netflix signs deals with movie studios and TV networks that let it use their content within certain geographical bounds. Leave the U.S. and the license between Netflix and Columbia or Tristar Pictures changes. Fly to Argentina or Acapulco and no Ant-Man for you. VPNs, or virtual private networks, can act as a workaround, however, letting you stream in those locations — or they could, until Netflix started blocking them earlier this year. Those VPN providers claim users are so fed up that they’re actually quitting the streaming giant.

“Globalization shouldn’t be used only when it’s convenient for corporations, but also when it gives rights and options to people.”

“Due to Netflix efforts to stop its subscribers from watching geo-blocked content, many users around the world are switching to such streaming services as YouTube Red, Hulu or Amazon Prime,” reads a press release that crossed my desk this morning from NordVPN, one of the largest such companies.

For what it’s worth, Netflix sure doesn’t seem to be suffering. The company has seen very steady growth for the past four years, culminating in the fourth quarter of 2015, where it had 74.76 million worldwide subscribers.

Here’s the thing: What the VPN providers are doing isn’t illegal. This isn’t breaking the law, much though it may seem like it. Copyright violations aren’t criminal law. It’s not illegal to watch The Revenant in Romania, although 20th Century Fox sure hasn’t licensed that right to Netflix. Companies like NordVPN make a stronger case than just the law, however, arguing that it’s all about freedom. Yours. Americas. The Internet. All of that stuff.

“Globalization shouldn’t be used only when it’s convenient for corporations, but also when it gives rights and options to people,” Raminta Lilaite, PR Manager for NordVPN, told me. “That’s why we also strive to provide people with freedom of speech and help them reach common sources of global content — such as Wikipedia or YouTube — in the countries where such content is blocked.”

Behind-the-Screens-110815-netflix-2 — Image used with permission by copyright holder

“For example, our tool recently helped many people during election in Uganda when all the social media was shut down. Only through a VPN/proxy server people were able to connect to social networks and to freely share their opinions.”

That’s a wonderfully egalitarian position. But the law is the law, isn’t it? Wired put it nicely:

Netflix invests heavily in licensing content from networks and studios around the world. Those deals include restrictions that give Netflix the right to stream movies and series only in agreed-upon countries. Netflix’s terms of service explicitly state viewers can only use its service in the country where a user has an account, and that the company will “use technologies to verify your geographic location.”

Simply put, if you’re an American in France, you aren’t allowed to stream Netflix anymore. Netflix doesn’t have a license to stream you the same content in Paris that you can get in Pawtucket, regardless of what you’ve paid for. Bypassing that is really neat for a user that wants access to watch, say, Scarface, which Netflix just released. But Netflix didn’t get a license from Universal Pictures for international distribution. You’re not supposed to watch it there. Aren’t VPNs facilitating this contract violation?

As Netflix put it: “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.”

Yet other VPN providers echo the same message as NordVPN: It’s not just about your right to watch The Sopranos in Spain. This is about the very framework of the Internet, dammit!

Netflix doesn’t have a license to stream you the same content in Paris that you can get in Pawtucket.

“We believe in an Open Internet,” Ben Matthews with VPN provider Proxmate, told Digital Trends. “We believe that people should have the right to access the same content regardless of their location. There is no clear ruling in any country that the use of the proxy services is illegal and opinion certainly seems to favour using services like Proxmate.”

He cites a spokesperson for Attorney-General Robert McClelland, who told The Australian in December that “in relation to the use of VPNs by Australians to access services such as Hulu and Netflix, on the limited information provided there does not appear to be an infringement of copyright law in Australia.”

Again, it’s not against the law per se.

“Lawyers say is it unlikely that using a proxy service to access U.S. Netflix or other similar foreign services could be considered a breach of U.S. or Canadian copyright law.”

Netflix declined to talk to me on the record for this article, citing instead the January blog post I cited earlier that spells out the company position. But Netflix clearly wants to increase the amount of content that is available everywhere: Just look at Narcos, Daredevil, Unbreakable Kimmy Schmidt, and many more original and licensed titles, such as How To Get Away With Murder and Gotham.

But until the company lifts the ban, or until the U.S. revises copyright law, those content restrictions remain. And illegal, immoral, or whatever, when you’re abroad, you’re SOL without a VPN.

As Netflix says ‘no’ to streaming abroad, viewers skirt the rules … or leave

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