- Netflix has a smaller/worse selection in the UK, than in the US, and
- Netflix charges more in the UK than in the US, and
- A UK person could easily get access to Netflix US by getting a friend in the US (or a US-based ebay seller) to set up their Netflix account
It would be nearly impossible for Netflix to comply with their agreements with content owners.
Limiting content based on billing address is easier to bypass than your post suggests.
I think this is why they're doing it this way, at least they get paid. For Netflix it doesn't really matter which region a subscriber uses as long as they pay.
I think they just act against VPN use because the content owners force them to. They love trying to enforce their old borders in a digital world that has none. Personally I think they should be happy that users are going out of their way to pay for the content given how many alternatives are available. They even pay more for the VPN itself.
Really, how many users will go like "Oh blast, my favourite show is not available in my region, guess I better wait until someone inks a deal and allows me to watch it"?
Shows are worth disproportionately more in some territories, local broadcasters are also very good customers they want to keep happy and only license in areas covered by their transmission windows, basic things like the structure of the school holidays and weather make a tremendous difference when it's profitable to launch a show etc etc.
Just refusing to take someone's money and expecting them to wait until you will is not realistic. Even people that have worries about torrents will have friends/colleagues/nephews that are happy to produce a USB stick upon request.
In theory a single someone can share with another single someone but multiple households would be hard pressed to do so as it would be easy to exceed the number of screens preventing others who pay for the service from watching.
If you aren't already paying the extra $5 for 4 screens and UHD you only get 2 HD screens which is even more unsuited for sharing.
This can't be any random stranger if the UK person will be using the US person's means of payments. Therefore, not 100% but it could work in most cases.
One thing which supports your view: Spotify uses card billing address, and has large international pricing differences, but I don't hear much about people bypassing it by getting someone in the Philippines to pay for their account.
They sell netflix cards at supermarkets, so they would need to cease that also.
Netflix could trivially buy the rights cheaply for a small country with a tiny economy and then use these cards to sell to the US or other major countries where the rights could cost a thousand percent more.
No competent distributor will let them do this.
If you don't believe me, ask a Chinese friend to show you how easy it is to buy a Netflix account on Taobao.
So perhaps Netflix should actually disrupt the industry by killing those stupid regional agreements that are a vestige from when film was distributed on reels.
Films are still sold that way, but if anyone could crack the country-specific market paradigm, surely Netflix could.
I stopped paying for Netflix for a lot of reasons, but the straw that broke the camels back for me was when I wanted to watch something with my Fiancé who lives in the UK and despite the series in question being branded a Netflix series, they didn’t have it on their service in the UK.
I don’t lay this all at Netflix’s feet. This stuff has always been fucked and Netflix has less leverage then ever since every other rights holders wants toss their hat into the ring and hope they reach at least a break even point while their competitors fail and then consolidation happens as the losers make deals with the winners.
I don’t mind paying for services but the incredible fragmentation of the market right now has pushed me back over the line where it is so much easier and more convenient with less bullshit (You still can’t get more than 720p unless you’re using Edge on PC) involved to torrent the limited selection of media I’m interested in again.
It could be that the decision about which service gets European access rights is made only after the decision about which content will even be allowed for broadcast in a region.
It could be that in these huge corporations, the business side of the company negotiates regional access rights. The totally separate legal department enforces the geofence, and they are driven more by their contact with content producers’ anti-piracy legal departments, squeaky wheel style.
Anyhow, like I said, just speculation.
But yes, location is the thing that matters in contracts, because that is actually much easier to demonstrate.