Netflix remains steadfast in its goal to crack down on Virtual Private Network (VPN) users who get access to United States-only content that it may or may not have pressured Paypal into blocking companies that provide VPN and Smart Domain Name System (SmartDNS) services.
However, it seems PayPal's actions are not enough, so Netflix will have to take other actions in order to reach its goal of restricting access to its subscribers who are using a VPN.
On Feb. 3, news about PayPal irrevocably restricting activities on its site to VPN and SmartDNS providers broke, which led to speculations that the company was either pressured by or is supporting Netflix's aim. It really doesn't matter which one is true because it was not a definite solution and it's still business as usual for the affected companies.
Netflix has already tried to block IP addresses that VPN services use and has successfully blocked subscribers from seeing content outside of their actual region by detecting the browser's settings. Some users have seen pop-up messages from Netflix asking them to turn off an unblocker or proxy service and that access will be granted once the service is off. That counter-measure affected VPN subscribers for a few hours, or at least until the VPN provider was able to switch to another IP that Netflix has not blocked yet.
Netflix's solution - to find all the IP ranges that VPN services use and block them - was easily countered because it is easy to find IP ranges that have not been blocked and switch to those instead, which is most likely what was done.
"As a global payments company, we have to comply with laws set by governments and regulatory agencies ... PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights," a spokesperson for PayPal said.
PayPal's move to assist Netflix - something that both companies neither confirm nor deny - would not be a permanent solution either and may just hurt PayPal more than the companies that it blocks or restricts.
For starters, just like how UnoTelly simply asked its subscribers to use a credit card to pay for its services instead of PayPal, other VPN providers can and most likely will do the same. What would happen is that, for PayPal account holders whose main transaction is to securely pay off their VPN service subscription, their accounts would likely become dormant.
Another danger to PayPal's aggressive action is that the assumption is too generalized. Not all subscribers use VPN services as a workaround to Netflix's geo-blocking even if the service explicitly states that it can be used to do so. In the end, only Netflix gets a favorable result because, while it basks in the additional blocks, PayPal gets the bulk of complaints from both companies and individual account holders.
A researcher commented that Netflix should stop looking at IP addresses and proposed a new solution to aid in its geo-blocking dilemma. We'll just have to wait and see whether Netflix takes him up on it.
"Some members use proxies or 'unblockers' to access titles available outside their territory. ... This technology continues to evolve and we are evolving with it," Netflix Vice President of Content Delivery Architecture David Fullagar wrote. It's a problem, but one that has no definite solution in sight yet.
Netflix could just hurry up with processing licenses in other countries for its "Netflix Everywhere" offering. Then again, unless all copyright holders agree to open their content to other regions, the problem will persist.
Perhaps Netflix can just work with some VPN providers for the workaround because, from what we see, if these somewhat legal businesses are taken down, we may just see a spike in piracy.