nScreenMedia OTT multiscreen media analysis

Hollywood in la la land about geo-piracy and VPN protection

Why people use a VPN

One thing that always strikes me when I am meeting industry figures in LA, London or New York, is how few of them have any real grasp of how common/easy many forms of piracy are.

David Briggs Geoguard

David Briggs, President of Geoguard

[Today’s post is written by David Briggs, Chairman of Geoguard.]

Part of the issue is that those media execs have all the Cable/Netflix/HBO/Sports packages they need to see the content they want; and thus, suffer no supply & demand imbalance in their personal content world. The other reason is that they tend to be older and as such belong to that 40+ age group that still pay for content (much to the amazement of their younger relatives!). A mere 13% of 45-64-year olds use a VPN, a huge contrast to the 16-34 year old bracket who make up 68% of the VPN age demographic (according to Global Web Index’s latest survey of VPN users).

World media supporting spread of VPN use

Mainstream media outside of the US, on the other hand, writes with a deep and broad knowledge of different piracy methods; from Kodi Boxes to VPNs and DNS Proxies, with 1 in 4 internet users employing a VPN in the last month. Canada, Australia, and Singapore’s mainstream media often have front page news about the latest hit to their viewing “rights” because of some introduction of piracy controls by one OTT broadcaster or another. Malcolm Turnbull, the Prime Minister of Australia, even has a page on his website reassuring his fellow Australians that it is perfectly legal to use VPNs to watch US Netflix from Australia.

So, no surprise then that the Singapore Straits Times, in covering the changing OTT landscape, casually include a complaint about having to also pay for a VPN to watch US content on Amazon and Netflix!

Such an assertion is just common knowledge in markets around the world but would seem alien to many figures in the industry in LA. For them, they might wonder “Why would anyone turn on a VPN?”

Hollywood doesn’t see the threat from VPNs

Global Web Index’s latest research into VPN usage only serves to prove this point. Worldwide VPN usage is standard for more than 25% of net users, and they are turning on VPNs primarily to access content from abroad. That is why they pay for a VPN and why they use one. However, in the US, the rationale (and association in Americans’ eyes) is to protect users’ privacy.

So, if an American Film, TV and Sports exec hears the term VPN, he or she does not perceive a threat to their global windowing strategy.  Rather, their thoughts are that VPNs are nothing to do with piracy and just to do with privacy. This belief is mostly true in the US market, but it is only true in that market. Any perceived threat to windowing strategy would be taken very seriously because it is crucial to optimizing sales and maximizing the value of content by selling exclusively to the highest bidder.

This kind of cultural assumption is of course very dangerous when you are applying risk profiles from a domestic market through to a global one.

Understanding piracy in its many forms, whether of the PirateBay variety or the VPN variety, requires a deep understanding of the situation in every market and across every demographic. The danger for the industry is if decisions are made with LA’s media industry execs’ rose-tinted glasses only, and pay no regard to what is happening elsewhere in the world.

The market for media is experiencing upheavals from new entrants such as Facebook, Google, and Amazon. Eyeballs are migrating from set-top box based viewing to multi-screen OTT based viewing. In this environment, now is not the time to neglect the reality of how consumers are accessing content and where value (for the Rights Holders and their traditional customers) is leaking away.

Why it matters

Territorial exclusivity underpins the content monetization strategy of most rights holders.

For example, the English Premier League makes 65% of total revenues from just one country thanks to exclusive deals with Sky and BT Sports.

The explosion in popular usage of VPN’s specifically to watch content from other territories is, if left unchecked, an existential threat to the principle of “The Exclusivity Premium”.


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