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Quickflix Wants Netflix To Drop Australian VPN Users
ashshy writes 200,000 Australian residents reportedly use Netflix today, tunneling their video traffic to the US, UK, and other Netflix markets via VPN connections. A proper Netflix Down Under service isn't expected to launch until 2015. Last week, Aussie video streaming company Quickflix told Netflix to stop this practice, so Australian viewers can return to Quickflix and other local alternatives. But Quickflix CEO Stephen Langsford didn't explain how Netflix could restrict Australian VPN users, beyond the IP geolocating and credit card billing address checks it already runs. Today, ZDNet's Josh Taylor ripped into the absurdity of Quickflix's demands. From the article: "If Netflix cuts those people off, they're going to know that it was at the behest of Foxtel and Quickflix, and would likely boycott those services instead of flocking to them. If nothing else, it would encourage those who have tried to do the right thing by subscribing and paying for content on Netflix to return to copyright infringement."
"Licensing issues" seems to be the standard reply. But, why would licensing in Australia be different from licensing elsewhere? Isn't a show streamed to Australia is just as profitable as a show streamed to Europe or America?
Yes, but Netflix must sign and *pay for* a license in each separate territory. The company pays per show/movie, per market, per year (or whatever licensing timeframe), and it doesn't make sense to roll out an actual service until you have the rights to a decent content library in that new territory.
Netflix is working on licenses for Australia, but doesn't have a service yet. And whatever agreements it did sign so far likely don't become active until Launch Date X.
So as usual, it all boils down to costs. Follow the money.
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O Moo.
Why would a content provider care about geography?
Mostly decades-long exclusive distribution contracts that predate the Internet.
Quickflix's biggest shareholder is an Nine Entertainment, which appears to be their ticketmaster and clearchannel equivalent. They don't appear to be a telco but they do seem likely to be in bed with them.
TV networks in various countries buy exclusive rights to distribute the program in thier country (or sometimes a group of countries, for example EU regs mean you can't really limit a license to an individual country in the EU).
The primary rightsholder can't sell rights to distribute the program worldwide to netflix because they have already sold exclusive rights to distribute it in particular countries to various TV networks.
So getting rights to show programs in australia requires a totally new set of negotiations with totally different parties to getting rights to show those same shows in the US.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register