Business·Analysis

After Netflix crackdown on border-hopping, Canadians ready to return to piracy

Netflix has upset many loyal customers in Canada recently by cutting off access to VPN services. But the crackdown may just reveal the 'dirty little secret' that Canadians are big pirates at heart.

Cutting off border hoppers may cause many customers to go back to illegal downloading or streaming

Netflix customer Susan Lorenz of Toronto doesn't understand why the company is suddenly shutting her out from the content she used to be able to see. (Susan Lorenz)

Many Canadians are enraged by Netflix's declared war on cross-border watchers, who skirt the company's rules by sneaking across virtual borders to stream Netflix shows and movies restricted to other countries.

Sometimes it's hard to be satisfied with Netflix Canada's library when our American neighbours have, it's estimated, access to almost double the content.

Since mid-January, the streaming service giant is cracking down on border hoppers by blocking access to foreign content. Netflix made the sudden move reportedly at the behest of Hollywood studios who demand country-exclusive licensing agreements.

But this big and bold clampdown may backfire — at least in Canada. Turns out, Canadians are big pirates at heart. Apparently, we feel somewhat entitled to download illegal content when we don't have cheap and easy access.

Instead of shelling out $10 for a Netflix subscription, some people now may opt to pay nothing at all to get what they want.

'Whoops, something went wrong'

Disgruntled Netflix customers now exploring piracy include Suzan Lorenz in Toronto.

"I think I might be saying goodbye to Netflix and go the truly illegal route," she tells CBC News.

For about a year, Lorenz subscribed to Netflix Canada, but her family freely accessed the streaming service's shows from across the globe.

Her three children like to watch the forensics investigation series, CSI. Lorenz enjoys European crime dramas like the original Swedish version of Wallander. These TV series can be found in Netflix's U.S. library but are technically not available to Canadian customers. 

So Lorenz subscribed to an unblocking service that provided the technology needed to access Netflix shows in other countries.

But since the streaming service began its crackdown, border-hopping customers have started suddenly seeing their Netflix access blocked.

Nowadays, when Lorenz tries to watch foreign content, her TV screen instead flashes a message: "Whoops, something went wrong."

Many Netflix customers in Canada have recently gotten the error message above when trying to log into the site via a Virtual Private Network. (Sophia Harris/CBC)

"So they've clearly intercepted [me]," she says.

Because she pays for the service and has been able to skirt the rules for so long, Lorenz doesn't understand why Netflix is suddenly shutting her out.

"I don't know why I can't have international access," she says. "That doesn't make sense to me."

Lorenz cut her cable because she was frustrated with her TV provider's cost, content selection and service. So she signed up for Netflix but, once again, she believes she's getting a raw deal.

"It's kind of frustrating because you try to be legal, you try to be above board. And they're just big bullies and I'm really tired of big bullies."

Now Lorenz is considering downloading unauthorized content to get the shows she no can no longer access.

"It just really annoys me someone out there is censoring and telling us what we can see," she says.

All aboard the pirate ship

If Netflix continues its crackdown, we're likely to see more Canadians turning to piracy. That's apparently what Canadians do when we don't have easy access to cheap content.

Market research analyst, Brahm Eiley calls it our "dirty little secret."

He says statistics on piracy are scant but that, according to his findings, Canadians are bigger cord cutters than Americans. On the surface that seems odd because Americans have access to many more low-cost streaming services such as Amazon, HBO and Hulu.

However, we find other ways to get what we desire — such as downloading unauthorized films and TV series.

"Canadians are kind of more comfortable going out and finding content in whatever creative way they want," explains Eiley, president of the Toronto-based market research company, Convergence Consulting Group.

But he adds that access to multiple, inexpensive but convenient streaming services tends to curb piracy.

"If the alternatives are there and they're not crazily priced, most people will pay for them," he explains.

Indeed, Netflix itself used to boast about how its service took a bite out of illegal downloading.

But crack down on what your customers can watch and those piracy numbers could shoot right back up.

Does Netflix really care?

Social media expert Chris Trottier believes piracy rates will rise if Netflix continues its crackdown

In the technology era, people don't take kindly to content controls like regional restrictions, he says.

"The old models of controls of who sees what, that's anti-internet," says the CEO of Vancouver-based social media consulting company, Boldkick.

So Trottier concludes that, these days, content distributors have few options.

"The choice is, they can make the [content] a lot more easier to access and have customers," or they can lose customers to piracy, he says.

But Netflix hardly seems concerned; it now boasts more than 81.5 million members worldwide.

During its earnings call this week, Netflix's CEO Reed Hastings called affected customers "a very small but quite vocal minority." He said that they were "inconsequential" to the company.

Maybe so, but then Netflix is blowing off customers like Lorenz who says she would actually pay the company more for access to international shows.

Instead, she may now opt for paying nothing and pirating that content.

About the Author

Sophia Harris

Business reporter

Sophia Harris has worked as a CBC video journalist across the country, covering everything from the start of the annual lobster fishery in Yarmouth, N.S., to farming in Saskatchewan. She now has found a good home at the business unit in Toronto. Contact: sophia.harris@cbc.ca

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