04 August 2014

Netflix in Australia

Using Netflix in Australia is a breach of the customer contract between the user and Netflix, even if you are normally domiciled in the USA.

Netflix, like many other companies that distribute media content, is restricted by the geographic regions to which it can provide content. This is hard to do without letting in customers who don't qualify, and accidentally blocking people who do qualify. There are around 20 million Australians, many of which are wanna-be Netflix customers, waving their credit cards, and they can't understand why they can't join the 314 million USA citizens who can access Netflix.

Netflix is just a distributor (well, it's not a content creator for now, but who knows...). It is bound by its contractual relations with its content providers. Assuming Netflix has a rational approach to business, it is not interested in being bound by geographic rules - it would serve anyone in the world if it could provide a satisfactory service.

Content providers have spent money creating content. They will, by and large, not do that if they cannot make a profit from their efforts. In addition, like most economically rational organisations, they will try to maximise return.  I am a lawyer - it might surprise you, but I do give away substantial amounts of my chargeable time, but I try to maximise my return on my personal effort.

The divide between content owners and content distributors is extremely well-canvassed. I'm not writing much new here. What I do want to suggest is that both providers and distributors might find a bit of "leakage", provided there is some remuneration, is acceptable. Why would I suggest that? One of the big questions is: should I (assuming I am the content provider) sell to Australia/UK/New Zealand/Luxembourg/Mexico for the same price that I sell to the USA? Do I refuse to sell until I work out how much I can sell it for? Or, do I just work out how much I can sell in that geographic market, and be prepared to delay launch for a few years knowing that my prices will make up for it? Perhaps the real issue is that the local rights owners just aren't able to make the deal work - there can be many reasons for this.

It's pretty easy for an Australian (or a USA citizen located in Australia) to use Netflix and pay their way. Netflix receives the same income as it would from a USA resident, and the content providers receive their share too. Do Netflix or their content providers really care? They probably do, because they need to look after their contractual obligations towards rights holders in other jurisdictions. These can limit the timing, format, first run, repeats and more. 

How does one do it? There's a few ways, but a quick search suggests that the most popular method is:
  1. set up an account with www.getflix.com.au and change your router settings as advised;
  2. jump on line and go to Netflix and create an account, even with an Australian credit card;
  3. if you have a Chromecast or Roku box, make changes to the static routes on your router;
  4. enjoy.
That was pretty easy to say. In fact, item 3 is harder than it looks. It's possibly a bit more fiddly than you might prefer, but it all does work.  But, there are problems with doing this, and they revolve around breach of contract with Netflix and breach of copyright.

This hardware solution also doesn't mean I can take my Chromecast with me on holidays to Vietnam or France and plug it in and watch (although a VPN on a computer will make it work). The need to configure the edge router means that a Chromecast will never work in a hotel. Having said that, when I'm in Hoi An or Strasbourg, watching telly is not on my list of priorities.

Geographic pricing is nothing new. Many years ago Ford Australia used to build an ugly convertible that sold for less in the USA than it did in Australia. Ford Australia won my admiration by simply admitting that the sell price in Australis was simply what the market would bear - there was little competition.

So my tiny contribution to the geographic content argument is: we are not talking about cars, and that way of thinking doesn't work any more.