Why Netflix Global Is The Future Of Streaming

Netflix has been in the news again this week, with its CEO making the case for a "Netflix Global" service where all content is available to all customers -- regardless of their geographic location.

Look at current behaviors among Internet users and it’s not hard to see why Netflix would want to introduce such a service as soon as possible. Currently, about a quarter of all online adults say that they used a Virtual Private Network (VPN) or Proxy Server to access the Internet -- a figure that rises even higher among the Netflix user base. It’s not quite the niche activity that many still believe it to be. And while such tools can offer a range of benefits -- especially for those looking to protect their anonymity while browsing the Internet -- by far the top motivation for using them is to access better entertainment content. More than 1 in 10 online adults already say they are doing this. As awareness of VPNs grows still further, we have to imagine that this number will follow suit.

When it comes to a service like Netflix, the end-user benefits of connecting via a VPN are patently clear. Fool Netflix into thinking you’re in the U.S. by using an American-based VPN and entering any U.S. ZIP code and you’ve got instant access to the content-provider’s richest library of shows -- including many titles that are simply not available outside of the U.S. And that’s the key point here: this isn’t just about accessing Netflix in countries where it’s not yet available -- although this trend is usually the one that captures all the headlines (step forward, China and Australia, in particular). This is also about current subscribers in existing Netflix markets tapping into the U.S. version to get shows they can’t watch in their own territory. It’s about watching "Scandal," "Grey’s Anatomy" or "Private Practice," for example (none of which are currently available to UK subscribers). Can it really be a coincidence that our data shows Canadians and Mexicans topping the table when it comes to accessing Netflix via a VPN? Hardly. They know what their neighbours in the U.S. are getting -- and want the same.

Clearly, this is a case of current supply simply not meeting demand. That feels pretty ironic given that content providers and studios have long been skeptical about the benefits of streaming services and -- whether by refusing permission altogether or by licensing content for certain territories only -- have often made life pretty tricky for names like Spotify and Netflix. One obvious result is that many customers who would willingly pay for access are being prevented from doing so. Some are turning to VPNs --  and it’s certainly worth noting that the VPN audience is more likely than average to be paying for digital content (each month, 75% of VPN users are doing this). But for others, pirate services will be an obvious destination.

This is a problem that will not go away. For both music and TV/film content, our data shows a consistent move away from downloads toward streaming services. Increasingly, then, ownership is being superseded in importance by access and, as a result, all content providers out there need to be making access as seamless and appealing as possible. Allowing people different levels of access based on their country of residence is the exact opposite of what should be happening. Little wonder, then, that Netflix is championing a global service: it would allow it to give a more consistent user experience, to monetize existing members more effectively and to grow its global user base much more quickly and easily. Along the way, the notion of paying-for-content would undoubtedly become a little more firmly embedded among the digital population -- making all of those current network and studio licensing restrictions look a little counterproductive. Netflix US may have been where it started, but it’s Netflix Global that represents the future.

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