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Pop Culture

Netflix not the bad guy in blocking proxy access to content

Its move to block access to its overseas content is correct even if it means losing international subscribers

Boy, did people here turn on Netflix fast.

In a single day, the popular streaming service went from being so venerated to becoming the big bad corporate wolf.

When the American streaming company announced last week that it would soon start blocking proxy access to its overseas content, netizens decried the decision for what they believed was another case of corporate greed.

After all, Netflix's move forces subscribers to pay subscription fees that are on a par with their American counterpart, but for a smaller library of content.

In the United States, monthly subscription fees start from US$7.99 (S$11.50), while Netflix Singapore's fees start from $10.98 a month. The content available on the Singapore service, however, is much more limited, with many popular TV shows such as Sherlock and House Of Cards missing from the menu.

Essentially, it looked like Netflix Singapore was trying to charge the same fees despite the fact that they had saved by not paying for the local licences to broadcast the same number of programmes here.

But well before Netflix Singapore launched a fortnight ago, the rights for those missing shows had been sold to other providers in the region - House Of Cards, for example, airs here on RTL CBS Entertainment.

The comparatively limited content on the local streaming service is precisely why many long-time Netflix fans here have preferred to hold on to their US subscription accounts and continue accessing the American service via VPN (virtual private network), a proxy that allows users to mask their locations from geo-restricted content.

Now that Netflix is about to block VPN, users are understandably ticked off. Where will they go to to get their Frank Underwood fix now?

Sure, they could turn to cable TV, but wasn't the entire point of having Netflix so that people could get all their favourite shows in one place for one fee, doing away with multiple subscriptions with different content providers once and for all?

Before users start slamming Netflix as just another avaricious and soulless company, however, they should consider this: The company actually knew that the move would be a public relations nightmare, but it went ahead and played the role of bad cop anyway.

After all, it could have avoided the thorny issue if it had simply turned a blind eye and allowed international users to continue accessing its overseas content via proxy services.

Given that these subscribers are legal paying customers to Netflix, the company is in fact losing business by blocking their access.

Netflix is not stupid enough to believe that the loss of a Netflix US subscriber here will automatically translate to a gain in a Netflix Singapore subscriber, especially if its content offerings are not the same in the two countries.

Neither are the other channels to be blamed for creating this current situation here, where some TV fans have to pay for more than one subscription in order to legally access their favourite shows.

All TV content companies, and not just Netflix, are just doing what businesses do: try to maximise revenue by enticing customers with as much attractive content as their budget allows them.

Before Netflix's entry, some channels saw the opportunity to buy and offer TV fans popular shows via legal platforms - why should they twiddle their thumbs and wait for Netflix to come?

Singapore was only one of 130 new countries where Netflix launched local services earlier this month as part of its extensive global expansion plans. Clearly, it is hoping to make its mark felt in every corner of the globe.

In the same online announcement it made about the VPN blocks, Netflix had also said that its goal is to eventually be able to "offer all of our content everywhere", and that it will "keep pushing towards" this reality.

Going by that claim, the company appears to have plans to pay for global licensing for all of its shows in the years to come.

Should that happen, Netflix will truly become the "global Internet TV network" that its chief executive Reed Hastings described it to be when he launched the service around the world.

By then, no one will have to make use of any sort of complex proxy service to access the content - the programmes will simply be there for viewing all in one place.

The real test then comes when the local licensing deals start to expire in a few years' time, because it is only then that users will know if Netflix keeps its promise.

And if indeed it does keep its promise and gains control of the bulk of the best programmes, another problem will emerge: Does anyone - content providers and/or consumers - really want this situation, where one company has all the say in pricing and everything else?

A version of this article appeared in the print edition of The Straits Times on January 20, 2016, with the headline 'Netflix playing by the rules'. Print Edition | Subscribe