In January, much to the dismay of many TV fans around the world, Netflix banned the use of VPN’s and proxies within its terms and conditions. This left many users of the service disgruntled that they were unable to stream content which was unavailable in the UK.
This sparked a debate which led us to the door of IP law experts MorningsideIP to discover why Netflix made such a bold move to ban the use of proxies.
What is a Proxy and why did Netflix ban them?
Installing and using a proxy is a common way for internet users to access news or websites that are unavailable in their own country – perfect if you’re travelling and want to catch up on the news back at home.
Using a proxy in conjunction with Netflix on the other hand meant that users were able to access a wider selection of titles which were not normally included in a standard Netflix subscription in their country.
When you look at the fine print, this action violates the terms of service that users agree to when they set up a subscription.
Both VPN and Proxy software work by passing an internet connection through a third party before connecting it to the target server, masking the true physical location of the computer.
Netflix, the law and patent infringement
In order to keep competitive advantage over its competitors, Netflix is extremely aggressive in its use of patents to protect content. In 2015, Netflix won a patent infringement litigation case with Rovi, an entertainment discovery software company.
The knock-on effect for Rovi was a 17% loss in share value once the case was won by Netflix. This demonstrates how powerful the Netflix brand is when it comes to patent protection.
How does Netflix ensure their content is protected?
Netflix negotiates with the original programme makers (as they have the full and final rights to all of the shows), however Netflix ensures it has the right to reproduce the content.
Netflix and value for money
A recent investigation in the UK revealed that the average British Netflix user pays 6% more per month and receives 86% less content (movies and television shows).
One solution for Netflix could be to put pressure on the global programme creators to license their content globally, rather than selecting specific countries or regions. This would mean that more users could access the shows and movies and take away the need for terms of service violations.
