Tag Archives: geo-dodging

How “Going Global” in New Zealand Hurts Legitimate Internet Providers

Last month we examined the issue of Internet providers in New Zealand being warned by the country’s broadcasters to take action against subscribers who use virtual private networks (VPNs) to get around geographical licensing restrictions. With these services, viewers around the country can access and view website content that might otherwise be restricted to other nations or regions.

Although this can sound harmless enough on the surface, when it comes to valuable content like movies, television, and music, there’s every chance it could mean the difference between business and bankruptcy for legitimate Internet providers in New Zealand.

 

Once you delve deeper it becomes clear just how intentional this practice is at a business level, not one driven by individual users. Several non-facilities based telecommunications companies – i.e. those with no central offices to pay for or networks to maintain – from New Zealand are engaged in the resale of broadband connections to residential subscribers. On its own this is of course a legitimate business model, much in the same way that non-network mobile providers in the U.S. make use of the main carrier networks to repackage and sell cellular services.

It’s the next step that has the major telecoms providers and rights holders up in arms, and with good reason.  As this article on Tech Policy Daily explains, the resellers are attempting to gain market share by bundling a DNS geo-block defeating mechanism into their broadband services. Essentially, they’re saying to customers that they can provide them with a way around those pesky viewing barriers, or “legal regional licensing agreements” to those of us who have some degree of respect for creative rights and control of content.

Where this particular article departs from fact is in suggesting that there is any argument that these non-facilities based resellers are promoting. One look at the marketing literature from these companies, or even the comments from those in charge, shows exactly where their intentions lie.

Take Slingshot, for example, who make no bones about their “Global Mode” sales pitch:

Slingshot Global Mode Plan

This marketing push is enough to assure customers that they will gain access to overseas content services such as Netflix simply by signing up with services like Slingshot.

What’s more, the offering is pitched in such a way that it makes it sound like this level of access is not only legitimate, but something they should expect from all providers. When those who have invested in networks, offices, and content licensing agreements specific to their country fail to offer such a global service, it perversely reflects badly on the legitimate provider, rather than the likes of Slingshot who are skirting the rules and riding on the infrastructure of other businesses.

The bottom line is that established and respected service providers spend more than US $300 million every year for rights to the content they bring to New Zealand. Add this to the cost of providing a variety of traditional and Internet-based services to customers, with all the infrastructure and capital costs that brings, and it’s a significant investment in bringing that content to the country in the many ways viewers and listeners want to consume it.

While there may be some lag between release windows, the fact is that legitimate services are constantly evolving to meet customer demand and the licensing agreements in place ensure that creators are rewarded for each new market in which their work succeeds. This is the basis for continued revenue to the most in-demand creative talent, wherever it is in the world, and a keystone incentive to keep production flowing. Free riders, in this case the businesses who trade on the back of other providers’ networks and promote unlicensed content as a competitive advantage, only detract from that carefully constructed ecosystem.

An important point to note is that this is a battle against unfair business practices, not taking legal action against individual consumers who pursue their own viewing practices. John Fellet, CEO of Sky New Zealand, confirms this point, explaining that “this is a business-to-business issue; it’s about creating a fair playing field.”

When resellers are able to contribute little but gain a lot in terms of market share, it reduces the incentive for those providers with a major capital investment in the country, like Sky New Zealand and Telecom New Zealand, to continue bringing licensed programming from overseas and, more crucially, investing in home-grown creative talent. In that scenario the large American services like Netflix have an easier time dominating, even if they their revenue streams are diluted by geo-dodging, as they cut by far the biggest slice of the global pie.

In the long term this inhibits innovation and limits production diversity, which is exactly what customers want, and how free-riding resellers play on their trust to promote access to content that hasn’t been paid for.

Netflix VPN Errors Raise Divisive Issue of “Geo-Dodging”

Local access, global networkIf you subscribe to Netflix, you’re probably used to the monthly search for new and disappearing titles, as well as digging into the depths of its vault for movies and TV shows you may have missed. It can be a somewhat frustrating search, but ultimately rewarding when you uncover a hidden gem to watch or catch a series that’s just about to expire from the archives.

While that’s a common activity within any individual domestic viewing market, imagine multiplying that search by every single country in which the service operates — that’s 40 separate nations, as of September 2014.

Even so, due to varying international release requirements that have existed for some time and extend beyond any one streaming service, that’s exactly what some users choose to do. “Geo-dodging” involves using virtual proxy networks to bypass geographical restrictions – violating the service’s user agreement in the process – and accessing content licensed only for certain markets. Although it’s not considered fair game by streaming services or the studios who fill their viewing vaults, the practice has been a possibility for anyone with a little technical knowhow (and a lot of time to search for the content they want across tens of different viewing markets).

Now, however, Netflix appears to be clamping down on these digital border jumpers.

 

In December many observers noticed a spike in VPN-related errors when accessing the service via these more private connections, prompting speculation that Netflix and its ilk have seen more pressure from studios to enforce the regional release agreements under which they license much of their content. Although Netflix has denied any specific crackdown on the question of geo-dodging viewers,

Being the base of both Netflix and Hollywood, the U.S. vaults of streaming services are of course the prime destination for viewers outside of North America. Each area has its own popular titles that are currently unavailable in another, though, and creators in each original country have a right to control how and when their work comes out around the world.

Geo-dodging through the use of VPN’s is an activity which, while some distance down from illegal file sharing and torrent streaming on the anti-piracy laundry list,  remains a persistent thorn in the side of studios. Their business model and marketing campaigns are based upon carefully crafted release schedules designed to maximize movie-goers and minimize piracy.

Although these can sometimes be turned into lemonade, as with the enforced online release of The Interview over the holidays, all too often unexpected changes can leave studios with a lemon. The pre-release piracy of Expendables 3 last year showed just how much this kind of thing can bite at the box office, and though to a lesser extent, online sales of a title can just as easily be cannibalized in one market by viewers dipping into another area to stream before it is officially licensed.

The legal options for viewers remain extensive and impressive. Throw in a little patience (or a little extra investment to see a theater release, as creators often intended) and we begin to move toward a global release system that balances the needs of both creator and consumer, without grating too much on either party.