Netflix has been giving mixed signals regarding VPN and geo-location tools, with the first reports claiming a ban would hit, followed by CEO Reed Hastings and other executives appealing to VPN users, and now Netflix has changed its policy to destroy VPN users.
The terms of service change allows VPN users to be banned from the service. It is the first move by the streaming company to crack down on people changing location to watch movies only available on Netflix US.
It is not clear if Netflix will actually go through with the bans, but it does show that studios are cracking down on content being watched in regions where it is not supposed to be watched.
Studios that license content to Netflix already have a lot to lose from the move, considering customers pay $6 per month compared to $2.49 per episode on iTunes or $15 on DVD. Considering the licensee will only receive a small portion of the $6 per user on Netflix as well, it is most likely not beneficial to be on the platform.
That means shows tend to be unavailable or incomplete in other regions, due to lack of interest or lack of subscribers. Netflix US is far and away the most popular service with over 40 million subscribers in the US, and just 70 million subscribers in total.
Netflix is clearly trying to remove the barriers that the film studios are laying down, but it is a losing race. Even though Netflix has a huge audience and the potential to make a low budget TV show the next big thing (see Breaking Bad, White Collar), it is not enough for film studios to give up lucrative TV and DVD agreements in other regions.
Game of Thrones airing in all countries and coming to several internet TV providers might be incentive to change the trend, but HBO is in an advantageous position to offer the most watched TV show to as many people as possible.