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13 Comments • Dec 3, 2013 3160

Taking aim at pay TV

During the Arab Spring, Virtual Private Networks (VPNs) allowed people to access areas of the internet that had been shut off by their paranoid governments. Dissidents, rebels and freedom fighters have used VPNs as a gateway to unsanctioned social media and organised demonstrations that have toppled corrupt regimes. In Australia they are used to get Netflix.

Trivial as this might seem, the use of VPNs in Australia lets consumers jump the fences of regional restriction and gain access to content that we could previously only steal, at a price that leaves piracy, often seen as the Robin Hood of the internet age, looking more like a stingy refusal to pay for reasonably priced goods.

For those who pirate because they can’t live without the rush obtained by defrauding loose change from multi-billion dollar companies, do not despair. While there doesn’t appear to be anything illegal about paying for Netflix, or any other pay TV streaming service in Australia, it probably exists in enough of a legal grey area to keep your bad-boy image intact.

For those to whom piracy is motivated by financial considerations and not an insatiable lust for living just outside the law, VPNs provide something of a Goldilocks scenario; cheaper than Foxtel and without the delays that typify the Australian iTunes store or free-to-air networks.

I understand this might all sound a bit too good to be true, but either you’re just going to have to take me at my word or grit your teeth and read the rest of this paragraph. VPNs enable encrypted connection between various users on a private network through the medium of a public network, in this instance the internet. While they have a variety of uses, many of which pertain to the encryption element of their structure and help companies or individuals that want to keep their information secure, they also allow users access to the web through the VPN free of regional or government-related blocks on sites or services.

Before anyone asks why you would pay to stream content from a legitimate source when piracy is free, let’s be clear. If you’re a fan of a TV show or a movie, but you’re not willing to pay less than $20 per month for access to it, you’re not making some righteous stand against the corporations. You are being an ass.

If there weren’t enough numbers there to convince you to hang up your virtual eye-patch, here’s an exploration of the cavernous gulf between Netflix’s pay structure and Foxtel’s.

A Netflix subscription costs US$8 per month, and even after you factor in the cost of a reliable VPN service (usually around $5 per month) you’re still miles ahead of Foxtel’s Essentials package, worth $25 monthly plus $75 in set up costs of which Netflix has exactly none. If you want any of the movies that you get from Netflix through Foxtel, firstly you have to pay on top of your sizeable subscription for new release movies on demand, and secondly adding non pay-per-view movie channels to your package doubles your subscription to $50 per month.

If you want sport and movies you’re mad, because you’re paying $1200 per year for pay TV.

Complete lack of competition in the pay TV market means Foxtel can and is charging literally five times the cost of a Netflix subscription each month for the same content and Australian consumers will buy it even if they aren’t frothing at the mouth or compulsively licking windows.

It’s important to note here that there are alternatives to Netflix. Amazon Prime, HBO Go and Hulu Plus to name a few are all basically the same service and because they exist within a competitive environment they are all similarly priced. There are minor differences, which have been explored in depth by people far more qualified than myself (http://www.ibtimes.com/amazon-prime-vs-netflix-vs-hulu-plus-what-best-online-streaming-deal-378782). But given there have been rumors that Netflix is considering setting up shop in Australia, they merit a little more consideration.

The “losers” with the uptick in VPN usage are the distributors that sign contracts with Foxtel or free-to-air networks for delayed releases, only to have those release dates undercut by enterprising consumers plucking content straight out of US cyber-space. However the delayed release business model is rapidly decaying, especially when it comes to shows with a young, tech-savy demographic, i.e. the really successful ones.

This is the second side of the classic pincer movement that is the Australian entertainment market. Distributors and studios delay and limit releases, driving viewers into the cold, vice-like embrace of Foxtel or the often ludicrously over-priced, if pretty efficient, iTunes store.

With the advent of VPN usage in this country consumer behavior is finally finding a way to break this cycle and is, it seems, encouraging US streaming services to look at the high levels of piracy and regional restriction flaunting in this country as a sign that there is market share yet to be tapped into, not that we are a lost cause or a target for prosecution.

VPN-enabled access to streaming pay TV is not as good as the real thing. They place cost on top of subscriptions and are no replacement for real competition in the hard-wired pay-TV market. As a first step to toppling the tyrannical regime that controls our television screens however, it might be exactly what we need.

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Comments

13 Responses to Taking aim at pay TV

  1. Some Guy says:

    An interesting overview, I’d like to add one very helpful (and mostly free) method of bypassing geoblocks – Hola (www.hola.org). It’s a free Chrome/Firefox extension (or Mac/Windows application) and works very well with Netflix and Hulu, all of which I’ve been using for around a year.

    Also, a minor correction – Unfortunatly, HBO Go is not available unless you have an HBO cable subscription as well.

  2. Samuel Millett says:

    Also, you can’t subscribe to Netflix with an AU credit card, so add the cost of a virtual credit card service too. It STILL absolutely puts foxtel to shame. Outside of sports buffs, who on earth would subscribe to the foxtel business model? It’s embarrassing.

    • Wombat says:

      I don’t think this is true. I think you can use an AU credit card or Paypal, you just need to put in a fake US postcode to get past their access. Basically, they are well aware that foreigners are bypassing regional restrictions, they just cover their arses enough to let you be the one holding the can if you get caught.

  3. John Craig says:

    Couldn’t agree with you more Peter, your comment about US streaming services looking at our underground “piracy” as a big opportunity to create another market, rather than prosecute etc., brings back memories of Napster and MP3. All Sony/BMG could think of was that they had to prosecute those college kids who were stealing their music. They failed to identify one of the biggest business models which eventually took over porn on the internet and is now virtually owned by Apple with iTunes. Can you imagine if Sony had decided to just buy Napster and offer all the users to download the music and other frills for, say 5 cents a song. Good grief, the cash flow would have been astounding. Hope this happens with the VPN market.

  4. Wombat says:

    I tend to agree with you Peter, although you don’t mention that given the atrocious download speeds in Australia, streaming only works for low-quality video (yes, 1080p can still be low quality if it is overcompressed). So the choice is between ultra-HD Piratebay – or buffering, jumpy Netflix.

  5. Wayne Robinson says:

    I was playing with the idea of getting Netflix or HuluPlus for my iPad. There’s a hitch in that I need the free App from the Apple App Store. Which isn’t available in the Australian store. Only in the American store. And if I transfer to the American card, I’m not allowed to ‘purchase’ it there.

    Any solutions, anyone?

  6. Stephen Hutchison says:

    Can you get Amazon instant here downunder. Do you need a US credit card?

  7. Edward Burns says:

    The solution is simple. We kill the broadband.

  8. Ugliness says:

    Don’t forget that the VPN gives you access to the free BBC iplayer.

    The one I’m using allows me to select from about 4 countries to “appear” in.

    I’m also using it to watch Eurosport player to watch a mate’s son race in the British superbikes (as well watching other sports which I may as well since I’m paying for a subscription).

  9. Philobios says:

    Statistics and studies show Australians are willing to pay for content, provided it is priced fairly and on par with the rest of the world. That we are still held to ransom by distributors operating on outdated business models and using regional restrictions to bolster their profit margins indicate the time is ripe for a disruptor to liberate the Australian market.

  10. Peter H says:

    As someone who does this, I need to rebuff some myths:

    1. Netflix and Hulu Plus work with Aussie credit cards. Simply fudge your address and/or place a zero in front of your post code
    2. I don’t have a computer in the living room, and I do watch on my tv – using the $100 Apple Tv
    3. My iTunes library works from the Australian store. I switch to the US store on the apple tv use Netflix/Hulu
    4. I do not have nor need a login for the US iTunes store. I signed up for Netflix/Hulu via their websites and logged in via the tv
    5. Quality is very good (though not excellent), much better than SD on the itunes store (The Daily Show), and buffering is non existent. I’m watching on a 46″ screen.

  11. Peter H says:

    Using a service like unblock-us, rather than a VPN, greatly increases the quality and simplicity.

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