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Sony Pictures mad at Netflix’s failure to block overseas VPN users

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C

ComputerMKII

Banned
Oh boy

Leak accuses Netflix of “semi-sanctioning” piracy by “illegal” paying users.

Netflix's tolerance of overseas VPN users was a sore point in negotiations with Sony over licensing Breaking Bad, leaked e-mails revealed.

The latest data leaked from Sony Pictures Entertainment by hackers reveals that Sony executives had accused Netflix of breaching its licensing contract for Sony Pictures Television (SPT) shows by allowing customers in foreign markets to use virtual private networks to stream them, calling it piracy that is “semi-sanctioned by Netflix.”

Sony pressed Netflix for increased “geofiltering” control over its customers to prevent the practice, including restricting payment methods for the service to ways that would allow screening for customers living outside countries where Netflix had contractual rights. The move came as Sony was positioning to merge its own streaming offerings and other digital products into a “One Sony” digital operation to better compete with other services.

In November of 2013, as Sony Pictures Television was negotiating with Netflix over licensing of content—specifically, rights for Breaking Bad—the company’s president of international distribution Keith LeGoy e-mailed Sony Pictures Television President Steve Mosko to update him on the proceedings. The deal was important to Sony—SPT execs believed it would bring in $41 million in the 2014 fiscal year. In another e-mail to Mosko, SPT Executive Vice President and Chief Financial Officer Drew Shearer had emphasized, “We need to deliver the Netflix BB deal in FY14 like we thought or $41mm goes bye-bye from FY14.”

However, SPT executives felt Netflix was doing too little to control who could use its service—and in the process was damaging its licensing revenue overseas. LeGoy laid out the issues in his e-mail to Mosko in November of 2013:

Netflix do not closely monitor where some of their subscribers are registering from and don’t take steps to counter circumvention websites that allow people in, for example, Australia, to sign up to the US or the UK Netflix service and subscribe illegally (Netflix don’t as of now have a service in Australia, nor do they have Australian rights for our content). We have asked Netflix to take steps to more closely monitor circumvention websites, and to restrict methods of payment to more clearly weed out subscribers signing up for the service illegally. This is in effect another form of piracy—one semi-sanctioned by Netflix, since they are getting paid by subscribers in territories where Netflix does not have the rights to sell our content.

Netflix are heavily resistant to enforcing stricter financial geofiltering controls, as they claim this would present a too high bar to entry from legitimate subscribers. For example, they want people to be able to use various methods of payment (e.g. PayPal) where it is harder to determine where the subscriber is based. They recognize that this may cause illegal subscribers but they (of course) would rather err that way than create barriers to legitimate subscribers to sign up.

We have expressed our deep dissatisfaction with their approach and attitude. I’m sure other studios feel the same way, especially as we are now hearing from clients in Australia, South Africa and Iceland (to name a few) where significant numbers of people are able to subscribe to Netflix. Netflix of course get to collect sub revenues and inflate their sub count which in turn boosts their stock on Wall St., so they have every motivation to continue, even if it is illegal. This issue is almost certainly going to get more heated, since our goal and Netflix’s are in direct opposition.
Click to expand...

Another issue LeGoy raised was that Netflix was “bundling” content from SPT, making multiple shows from the company available in the United Kingdom and other countries where Netflix was overtly serving customers. “They maintain, incorrectly, that they do have the rights which is absolutely wrong,” LeGoy said in his e-mail, adding that “we are prepared to grant them these rights as we have done in Holland, but in return would want to gain extra value (as we did by giving the greater flexibility in our Dutch deal).”

But Netflix, LeGoy said, had “stated that they intend to continue doing more bundles without negotiating any new agreement, so we will need to send them a letter from our lawyers stating that this will put them in breach of their agreement with us. I am attaching a copy of the proposed letter.”

Netflix also wanted to tie any new agreement on Breaking Bad to licensing of the spinoff, Better Call Saul, for overseas viewing. "As in the US, they have asked to tie the Breaking Bad deal to the delivery of Saul—or in the event we don’t make Saul, to reduce their license period on Breaking Bad and the license fee," LeGoy said. "We have told them that we are prepared to make a separate deal for Breaking Bad which is not tied to Saul, or to keep to the deal we have agreed, but that we are not prepared to attach any conditionality around the terms for Breaking Bad."
Click to expand...
Source: http://arstechnica.com/tech-policy/...netflixs-failure-to-block-overseas-vpn-users/
 
A

Aiii

So not worth it
It is against no law -that I know of- to subscribe and use a service that is available in another country. So it cannot, by any stretch of the imagination, be called illegal. Making this:

for example, Australia, to sign up to the US or the UK Netflix service and subscribe illegally
Click to expand...

A wrong assessment of the situation.

Now can Sony complain about Netflix not thwarting such use? Sure. Is Netflix within their right to deny customers for any reason they see fit? Sure.

Is it illegal? Nope, it is not. Sony might want it to be, they might claim it to be because they're the right holders and want their content to only be available in one specific country, but there is no law that prohibits users using the service from another country. Sorry Sony, shit out of luck on that one.
 
D

Dunlop

Member
They are not wrong

In Canada you can access US Netflix using my Canadian Netflix account and a VPN or a DNS redirection service. I don't know anyone who actually uses the Canadian version lol
 
X

Xpike

Unconfirmed Member
Fuck you Sony, then try to make the other countries' Netflix good.
 
Z

zephervack

Member
So Sony prefers that people dont pay them at all?

Because if you block Netflix in those countries, people are not suddenly going to stop watching them, they will just resort to Flash sites/Torrents/ Usenet.
 
D

dan2026

Member
Drazgul said:
Only companies may benefit from globalization, not the customers.
Click to expand...

So instead of me paying to use a foreign Netflix to watch a show I couldn't otherwise watch, they would prefer me just torrenting it for free?

Is this the jist of their argument?
 
K

kulapik

Member
Fuck off Sony, I'm paying 8 bucks a month for getting Netflix via VPN on Spain. The other way would be straight pirating.
 
S

sdijoseph

Member
There aren't enough eye rolls in the world to express my contempt for the conflation of VPN usage with piracy. (#unblock4life)
 
Z

zephervack

Member
Does Sony not realize that people savvy enough to setup and use VPNs are also savvy enough to pirate their content, they should be thankful Netflix is providing a way to actually pay them back for some of that content.
 
S

sangreal

Member
dan2026 said:
They are mad over paying customers?

Wait what?
Click to expand...

GifGafIsTheBestGaf said:
fuck you sony

that's why netflix is still king
Click to expand...

obin_gam said:
I want to give Sony my money. Why wont they take it?
Click to expand...

They're mad that you're paying Netflix, who in turn is only paying Sony for US distribution rights.

dan2026 said:
So instead of me paying to use a foreign Netflix to watch a show I couldn't otherwise watch, they would prefer me just torrenting it for free?

Is this the jist of their argument?
Click to expand...

They would prefer that Netflix pays them for worldwide rights if they are going to offer the service worldwide
 
J

jred2k

Member
Dunlop said:
They are not wrong

In Canada you can access US Netflix using my Canadian Netflix account and a VPN or a DNS redirection service. I don't know anyone who actually uses the Canadian version lol
Click to expand...

Batman: TAS is only on the Canadian Netflix. Every region has something worth checking out. Scandinavian countries seem to get big Hollywood movies a bit quicker than the US.
 
N

neorej

ERMYGERD!
dan2026 said:
So instead of me paying to use a foreign Netflix to watch a show I couldn't otherwise watch, they would prefer me just torrenting it for free?

Is this the jist of their argument?
Click to expand...


No they'd prefer you don't watch at all, or at least until they deemed you worthy. Seriously, IP law and broadcast rights are messed up and based on 1850s technology.
 
A

arab

Member
Dunlop said:
They are not wrong

In Canada you can access US Netflix using my Canadian Netflix account and a VPN or a DNS redirection service. I don't know anyone who actually uses the Canadian version lol
Click to expand...

brooklyn nine-nine is on canadian netflix and not the us

that's about it
 
A

Aiii

So not worth it
sangreal said:
They're mad that you're paying Netflix, who in turn is only paying Sony for US distribution rights.
Click to expand...

That is their reasoning, and it's flawed.

Because if they weren't getting the money from these people accessing the content in the US, they wouldn't get any money at all because these people would be torrenting.

They're definitely not gonna wait a year to get the content on blu-ray like the good little consumers they're supposed to be while the entire internet discusses the latest Breaking Bad episode, that utopia ended around the time Napster was replaced by Kazaa.
 
D

dan2026

Member
sangreal said:
They would prefer that Netflix pays them for worldwide rights if they are going to offer the service worldwide
Click to expand...

How is this in any way the consumers problem?

They have to compete with piracy (ie free) so if they make it difficult for people or cut them out entirely, they lose money.

Its as simple as that.
 
S

sangreal

Member
dan2026 said:
How is this in any way the consumers problem?

They have to compete with piracy (ie free) so if they make it difficult for people or cut them out entirely, they lose money.

Its as simple as that.
Click to expand...

Who said it was the consumers problem? My point is that Sony is not getting paid, and that is why they are upset. All these "You don't want my money?!" posts make no sense. They aren't getting your money, because nobody is paying them for those rights. Sony is complaining to and about Netflix here, not consumers.

Yes, Sony would probably rather you pirate a movie from some torrent than pay another company money for the movie without any cut for Sony.
 
D

dan2026

Member
sangreal said:
Who said it was the consumers problem? My point is that Sony is not getting paid, and that is why they are upset. All these "You don't want my money?!" posts make no sense. They aren't getting your money, because nobody is paying them for those rights. Sony is complaining to and about Netflix here, not consumers.
Click to expand...

calling it piracy that is “semi-sanctioned by Netflix.”
Click to expand...

Sounds like they are calling paying customers pirates to me.
 
A

Aiii

So not worth it
sangreal said:
Who said it was the consumers problem? My point is that Sony is not getting paid, and that is why they are upset. All these "You don't want my money?!" posts make no sense. They aren't getting your money, because nobody is paying them for those rights. Sony is complaining to and about Netflix here, not consumers.

Yes, Sony would probably rather you pirate a movie from some torrent than pay another company money for the movie without any cut for Sony.
Click to expand...

More income for Netflix means more means for them to pay for rights, meaning they'll end up buying more movies, or be willing to pay more for rights. They certainly aren't paying the same amount for rights now than they did 5 years ago, I assure you that the more subscribers they get, the more money goes into Sony's pocket.
 
F

frankie_baby

Member
They do have a point though, if Netflix want to make all the stuff available to everyone then maybe they should start paying for worldwide rights
 
N

NinjaFridge

Unconfirmed Member
'It's everybody else's fault, not the companies that screw foreign markets.'
 
B

Beaulieu

Member
Dunlop said:
They are not wrong

In Canada you can access US Netflix using my Canadian Netflix account and a VPN or a DNS redirection service. I don't know anyone who actually uses the Canadian version lol
Click to expand...

... I do :(

Is it possible to do that using the PS4 netflix ?
 
C

Chris1

Member
solarus said:
I wouldn't have ever got netflix here in the uk if i couldn't use a vpn for american netflix.
Click to expand...

Pretty much.

Sony should be glad people are watching these on a legal paid service instead of pirating. The only way to beat piracy(or at least, tone it down heavily) really is to offer a cheap alternative that has everything in one place (spotify, steam, part-netflix are good examples of this). Everything netflix should be worldwide really, content being restricted depending on location is way more restrictive than it should be.

Beaulieu said:
... I do :(

Is it possible to do that using the PS4 netflix ?
Click to expand...


Somewhere in network settings there should be a option to set a DNS, just google US netflix DNS and you should find a free one that works.
 
G

GifGafIsTheBestGaf

Member
sangreal said:
They're mad that you're paying Netflix, who in turn is only paying Sony for US distribution rights.



They would prefer that Netflix pays them for worldwide rights if they are going to offer the service worldwide
Click to expand...

oh i understand their outcry alright but trying to get netflix to completely geolock their service for one shitty series
not really but the salt is real
screw them

typical sony, there goes my excitement for Vue even though i know better
 
S

Samara

Member
Dunlop said:
They are not wrong

In Canada you can access US Netflix using my Canadian Netflix account and a VPN or a DNS redirection service. I don't know anyone who actually uses the Canadian version lol
Click to expand...

I just discovered this thing. I've been using the Canadian Netflix for over 2 years. Get mad Sony, I love this
 
K

kris.

Banned
Dunlop said:
They are not wrong

In Canada you can access US Netflix using my Canadian Netflix account and a VPN or a DNS redirection service. I don't know anyone who actually uses the Canadian version lol
Click to expand...

Funnily enough, I use Canadian Netflix all the time. Your selection is fucking ridiculous sometimes.
 
D

Drazgul

Member
dan2026 said:
So instead of me paying to use a foreign Netflix to watch a show I couldn't otherwise watch, they would prefer me just torrenting it for free?

Is this the jist of their argument?
Click to expand...

No, they want you to use your local Netflix (or other such service if it isn't available) and stfu, if you happen to miss out on some show in particular then too bad.

And then they wonder why people use VPNs to circumvent that nonsense; some of the non-US Netflix catalogues are pathetic compared to the US one and yet they expect the same amount for it each month.
 
E

EatinOlives

Member
Chris1 said:
Pretty much.

Sony should be glad people are watching these on a legal paid service instead of pirating. The only way to beat piracy(or at least, tone it down heavily) really is to offer a cheap alternative that has everything in one place (spotify, steam, part-netflix are good examples of this). Everything netflix should be worldwide really, content being restricted depending on location is way more restrictive than it should be.




Somewhere in network settings there should be a option to set a DNS, just google US netflix DNS and you should find a free one that works.
Click to expand...

Sony doesn't give a fuck that there's a legal option for people worldwide to watch this content. They're angry that Netflix isn't paying them for worldwide distribution rights but is still lax about people worldwide watching their content anyway through VPN.
 
Z

zou

Member
sangreal said:
They would prefer that Netflix pays them for worldwide rights if they are going to offer the service worldwide
Click to expand...

They aren't offering it worldwide. Go to netflix.com from Germany and you get to see the German site. Go to netflix.com from Russia and you get to see a message about it not being available in Russia. They are already restricting access based on IP, making sure the net block is registered in the US (which is inherently flawed in itself).

Sony would like Netflix to block IP ranges they don't like. unblock-us.com seems to be using Voxel, so they should just block all of Voxel's and Internap's IP ranges? How about Azure? They share the same AS and ranges as Xbox Live. How do you block access from Azure VMs without affecting Xbox Live? What about Amazon? Block anyone using AWS?

So besides being a dubious argument, it's also highly problematic and challenging to actually put in place.
 
S

sangreal

Member
zou said:
They aren't offering it worldwide. Go to netflix.com from Germany and you get to see the German site. Go to netflix.com from Russia and you get to see a message about it not being available in Russia. They are already restricting access based on IP, making sure the net block is registered in the US (which is inherently flawed in itself).

Sony would like Netflix to block IP ranges they don't like. unblock-us.com seems to be using Voxel, so they should just block all of Voxel's and Internap's IP ranges? How about Azure? They share the same AS and ranges as Xbox Live. How do you block access from Azure VMs without affecting Xbox Live? What about Amazon? Block anyone using AWS?

So besides being a dubious argument, it's also highly problematic and challenging to actually put in place.
Click to expand...

They are not asking for some magic solution -- they just want Netflix to stop accepting payment methods from countries that Netflix does not operate in and therefore does not pay for rights in. Since they do not do this, yes they are offering it worldwide
 
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