Netflix, Inc. (NFLX) Under Pressure from Movie Industry to Ban VPN Users

Netflix, Inc. (NASDAQ:NFLX) has come under fire in Australia for their lax attempts to limit which people should rightfully be able to access their U.S platform. As O.Canada.com reported today, the Australian Home Entertainment Distributors Association (AHEDA) is lobbying to have VPN users banned from accessing the service.

The association, which represents Paramount Home Media Distribution Australia, Roadshow Entertainment, Twentieth Century Fox Home Entertainment, Universal Sony Pictures Home Entertainment, Walt Disney Company (Australia), and Warner Bros. Entertainment among others in Australia, claims Netflix, Inc. (NASDAQ:NFLX)’s lax controls are costing local streaming services like Quickflix (and the local economy as a result) millions of dollars in revenue.

The island nation of under 25 million people boasts 200,000 Netflix, Inc. (NASDAQ:NFLX) subscribers, despite not having legal access to the service. While that may not seem like a lot, it actually represents a nearly 50% share of that market in Australia, one that is predicted to grow substantially in the coming years.

VPN’s, or virtual private networks, essentially act as the server home for users, tricking the sites they visit into believing the user is legitimately from the VPN’s location. Many of the most prominent of these services have known IP ranges however, are beginning to get shut out. Hulu, another U.S streaming service recently blocked anyone trying to access their service through many of these VPN servers.

Should Netflix, Inc. (NASDAQ:NFLX) choose to follow Hulu’s lead, the repercussions would extend far beyond Australia, and to users in any country trying to access the service through such a server; including users legitimately within the U.S. That in turn could cost Netflix, Inc. (NASDAQ:NFLX) thousands or even millions of subscribers.

While Netflix, Inc. (NASDAQ:NFLX) plans to eventually take up residence in Australia, a country for which they recently acquired the rights to the television series Gotham for, their services in other countries have sometimes been seen as inferior to the U.S offering. In Canada, where Netflix, Inc. (NASDAQ:NFLX) runs a standalone service, 35% of Canadian customers are using the U.S service instead of their native one according to a telephone survey conducted by The Media Technology Monitor earlier this year.

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