Netflix's master plan is global content licensing

Determining top SVOD provider Netflix's (NASDAQ: NFLX) next move is sometimes difficult. Unless CEO Reed Hastings or content guru Ted Sarandos specifically makes a statement on their intentions, the way it strategizes content acquisition or creation isn't always clear. However, Hastings' recent comments on combating online video piracy made it clear that Netflix has a goal to get worldwide licensing rights to all of the content on Netflix, in every country.

Pirating video content online, through torrents or other means, is an ongoing problem for rights holders. And while outright piracy is a bigger problem, according to Hastings, it's important to remove the incentive to illegally access content.

"The basic solution is for Netflix to get global and have its content be the same all around the world so there's no incentive" to use VPN masking, Hastings recently told Gizmodo Australia. "Then we can work on the more important part which is piracy."

Fixing global content rights issues would certainly put a damper on VPN masking of the SVOD provider's stream. Although Netflix is available in nearly 50 countries, including most recently Australia and Cuba, subscribers in one country get a different content lineup than another. To get content they want to watch, some users mask or spoof their IP addresses via a virtual private network to fool the Netflix service into thinking they're local.

While VPN masking isn't outright piracy in this case--the users must still subscribe to Netflix's service to stream video, meaning they are paying for content--it isn't kosher, either.

Getting global rights to all the content on Netflix in each of the countries it serves would solve the VPN masking issue for Netflix, and hopefully would prompt other service providers and rights holders to create similar licensing deals.

While the idea of global licensing sounds promising, the reality is a bit tougher. For one, Netflix is competing with incumbent providers in every country it's entered so far. In Australia, the SVOD provider is up against two streaming services, Stan and Presto, launched by StreamCo and Foxtel, respectively. "The competition between us will be fun and intense and great for Australians. We're all going to scramble for content with these services," Hastings told Gizmodo.

For more:
- see this Gizmodo interview
see this BGR story

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