Company cites copyright issues but users irked by crackdown on VPNs
When Netflix announced its India launch, audiences were delighted thinking that they would get access to its mammoth library of global content. The US-based company priced its services in line with global strategy at $7.99, or the equivalent in Indian rupee. The services in India are available under tiered pricing - Rs 500, Rs 650 and Rs 800 a month.
Most Indian users were disappointed when the online video services provider restricted their access to a very small portion of its library. The company says copyright issues prevent it from giving Indian consumers access to international content. The users, however, figured an easy way out.
They continued to access Netflix's US content through virtual private network (VPN), which allowed them to imitate the internet protocol (IP) address of users based in the US. This effectively meant dodging the Netflix firewall without much effort.
However, the company has now started blocking the VPNs and Indian users are being redirected to the Indian site. "Using VPNs or proxies to virtually cross borders violates Netflix's terms of use because of licensing restrictions on TV shows and movies," Netflix said in an emailed response.
But it seems VPNs have figured out a way to beat the new Netflix blocker as well. "NordVPN did have a number of servers blocked, but (it) has found a number of workaround options that are working thus far... Users can connect directly to Netflix server or they can connect to a few dedicated Netflix servers manually.
We are also preparing backup workaround options in case Netflix decides to intensify their VPN crackdown. We have received a number of inquiries from other VPN providers checking to see if our service was still working. It is sad to see that some users are being forced to choose between online security and streaming," said Marty P Kamden, CMO, NordVPN, a Panama-based company, in an emailed response.
Netflix, however, said it would keep finding ways to block the international content despite the price differential on content versus costs. "Netflix uses a variety of technologies to properly geo-locate members and to avoid attempts to circumvent proper geo-location," stated the company.
This, experts believe, will hit Netflix more than it expects. Users, who were ready to pay for content, will find ways to illegally access it via torrents or unsafe streaming websites, impacting the company's India revenue stream.
Even Netflix accepts that blocking the users would lead to problems, at least in the near future. "People will always try and find ways to get the content they want no matter (what) the technological barriers (are)," it said.
According to Abneesh Roy, associate director, Edelweiss Securities, Netflix is focusing on its long-term goals. "The company would want Indian consumers to pay in Indian currency for their long-term strategy. With consumers from India using VPNs, this purpose is defeated. It needs to get the pricing and content right to build the base.
From the consumers' point of view, why would he pay a premium here and get access to a truncated library in India when he can pay $10 or $12 and get access to the full content library in the US. It will take a couple of years for Netflix to get a robust library for India," he said.
This conundrum calls for Netflix to acquire India-specific content. While all the original shows Netflix produces will be available to global customers, native content will be a challenge since most leading networks - Star, Zee, Sony, Eros and Viacom18 - have their own over-the-top (OTT) platforms.
One of the company's strategies seems to be acquisition of content from entire Indian subcontinent. Pakistani content is much cheaper and has a fair amount of cultural compatibility with the Indian audiences. Netflix will be adding two Pakistani shows - Zindagi Gulzar Hai and Humsafar (both aired on Zee's mass premium channel Zindagi previously) in April.
This may also serve as a model for Spotify, the streaming audio service, which plans to enter India soon and is accessed by Indian users primarily via VPNs. However, with government keeping a close eye on users' logs to profile them is setting a dangerous precedent.
It means governments can force other content sites, such as Youtube, Facebook and Twitter, to block the use of VPNs from accessing their content. VPNs typically are not blocked by content providers. In China and Turkey, where Youtube, Facebook and Twitter are blocked, citizens use these networks to bypass the country-specific firewall and access information.
Photograph: Gonzalo Fuentes/Reuters
