Netflix – Why you can not have everything: the dilemma of licenses – ZDNet France

It’s finally happened. Netflix will establish digital fences by cutting access to its international catalogs to VPN users. This means that customers in the UK, Australia, the US and elsewhere will not be able to bypass geographic blocking Netflix to tap into the international library of movies and TV shows. Instead, they will be forced to use the services available in their area

The company has announced that all VPN users, proxies or unlocker. – Generally to access the US version the service, the better endowed – will be partitioned in the coming weeks in the local version

The contents are negotiated by contract by the beneficiaries

. The outcry subscribers’ side was not waiting. For Netflix, with the ability to bypass these restrictions, recorded many subscriptions. In short, Netflix sees accused of biting the hand that feeds

But here.. You can not have everything, all the time

This is a painful reality, especially for Australians like me, where one has the feeling of being the last to be served, and when it does, two months late and double the price. And it is even harder to understand that this situation is the result of negotiations between the old multinationals, and responding to the interests of broadcasters and content owners.

But the reason VPN access this judgment has nothing to do with the desire of consumers. These are economic issues and mechanisms in force in the licensing industry that define the rules of the game.

When entitled releases a new title, he wants to make the most of its content. He goes for it negotiate distribution agreements in different regions and to compensate as many times as possible.

A rights holder in the United States could sell a license to Sky in the UK and then give the exclusive first rights to Foxtel, a pay TV service in Australia, while disseminating the content on cable in the United States. The last thing that content owners want is that consumers bypass various paid services (and thus local distribution agreements) and so channel their habits on a single streaming service.

One stop shop for the contents: the desire of the consumer

Consumers may wish through unique access with a single payment and have all their favorite programs – a so Apple Music for TV and cinema – this falls within the perspective nightmare for content providers. As one member of this industry, such an agreement involves a unique billing relationship with consumers, or less money in the long run.

But the main objective is to get Netflix worldwide rights to be able to absorb the acquisition costs of a program on all of its subscribers. The aversion of holders of rights in respect of this model is one of the reasons for the creation of Netflix Originals. Realizing his own productions, Netflix can seduce while eliminating intermediaries subscribers.

The streaming services may claim the one stop shop for your content needs, but can not even Netflix US claim a complete catalog. You certainly do not find the blockbuster “Game of Thrones” HBO Netflix, whether in Miami or Melbourne Milton Keynes.

It is no coincidence that Netflix announced the end of the VPN only days after the CES 2016 and the launch of its service in over 130 additional countries.

Netflix had hitherto procrastinated about his intention or not to cut VPN access. But dollars speak for themselves: VPN subscribers pay the subscription after all. Now that Netflix has opened new legitimate services in 130 countries, although local catalogs are at the grass roots, cut the use of VPN is not cutting the revenue generated in those countries. Netflix and thus satisfied the rights holders.

Netflix can not get angry with rights holders

There is another factor at play. When a VPN runs your Internet traffic to the US to access the US content is positive for the number of US subscribers. But the US market is now almost at saturation point in terms of customer acquisition. For its growth, Netflix is ​​turning to international markets. The end VPN means that US customers will be accounted for as Brits, Australians, Koreans … and so on. And Netflix needs to convince investors of the success of its strategy of international expansion.

Netflix has certainly been put under pressure by rights holders and encouraged to cut Multipass the VPN, allowing distributors to preserve the localized distribution of their contents. Their wish was satisfied. Because ultimately it is they who have the power to cut off access to these types of programs that make an attractive Netflix service.

Although Netflix has been a breaking actor, it must nevertheless always negotiate with market and media companies worry about the sustainability of its licensing agreements. Perhaps in the future Netflix does it actually become a service with a unique offering in the world. Such a perspective is still far away though. Netflix can count on “House of Cards”, certainly, but content owners always have the trump card in hand.