Netflix Continues to Fight Over VPN Users in Australia

A leaked email from Sony Pictures showed high level of frustration by the executives at Netflix as they do not take measures to stop users in Australia, who bypass the geoblocks with VPN service. In 2014, Sony Pictures has suffered from severe cyber-attack. During the attack, Sony has lost over 30,000 documents and 170,000 emails resulting in damage to the company and leaking its major confidential financial information. Now, it is revealed that Sony lobbies and forces Netflix to cancel customers’ accounts that are associated with places where the streaming video has not yet launched.

Watching TV with bowl of popcorn

Sony Wants to Stop Users Accessing Netflix with VPN

One of the emails had a discussion between Sony and Netflix in November, 2013, where president of distribution complained about not stopping the customers in places like Australia as they access the service with the help of VPN service.

“We have asked Netflix to take steps to more closely monitor circumvention websites, and to restrict methods of payment to more clearly weed out subscribers signing up for the service illegally. This is in effect another form of piracy – one semi-sanctioned by Netflix, since they are getting paid by subscribers in territories where Netflix does not have the rights to sell our content,” Keith Le Goy, Sony Picture’s president of distribution said.

Malcolm Turnbull, Australian Communications Minister, pointed out that the use of VPN services is not a breach in Australian copyright law, i.e. the use of VPN service is completely legitimate.

VPN Service Clients are Protected by the Australian Law

Netflix is showing a ‘heavy resistance’ as Sony continues to push and enforce more strict controls on geo-filtering options. They suggest to do it through setting limiting payment ways, but as a result legitimate subscribers will suffer.

“We are now hearing from clients in Australia, South Africa, and Iceland (to name a few), where significant numbers of people are able to subscribe to Netflix. Netflix of course get to collect sub revenues and inflate their sub count, which in turn boosts their stock on Wall St, so they have every motivation to continue, even if it is illegal,” Le Goy said.

On Wednesday, Ted Sarantos, Netflix’s chief content officer said that many studios complain over customers, who choose to use VPN service. But he pointed out that the issue will naturally dissolve as soon as Netflix completes its global expansion by the end of 2016, when the company will have rights to films and TV shows in every region under global content agreement.


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