Cloud-based streaming services such as Netflix face a difficult battle with the IP owners from which much of their content is licensed — these companies sell distribution rights on a per-country basis in an effort to maximize profitability — forcing the operators of streaming services into the burdensome position of having different content catalogs for users in different countries.

The European Commission cracks down on content blocking

In Europe, the issues with these practices are prompting the European Commission to send a “statement of objection” (which is the precursor to an antitrust investigation) to five Hollywood studios and five terrestrial broadcasters regarding the practice of restricting content between European Union (EU) member countries. These restrictions run counter to one of the stated purposes of the EU to provide a common market for goods and services to be sold across all EU countries.

This is a subject of renewed interest for the European Commission, which formally announced the Digital Single Market initiative last month; the initiative is intended to identify and address issues related to the digital and physical delivery of goods and services across the 28 EU member countries. According to The Guardian, presently only 15% of online shoppers in the EU buy products from another country, while only 7% of small and medium sized businesses sell products across national borders.

Some VPN users try to circumvent content blocking

Users of video streaming services YouTube and Netflix feel the difficulty of having a substantively smaller content catalog compared to the content available in the US. Some users outside of the US paying for Netflix access have resorted to using a VPN to disguise the traffic origin, allowing these customers access to content otherwise unavailable outside of the US.

Interestingly, in an effort to limit the need for users to rely on a VPN to access content, Netflix monitors file sharing traffic to identify what films and TV programs are locally popular, and the company acquires the rights for those programs in order to provide a legal (and sanctioned) means to view that content in that country.

How this affects cloud pricing

The practice of IP-based content blocking can cause some difficulties when handling cloud services, particularly in circumstances where systems are configured to route around certain providers.

Effectively, the data transit cost is hidden to the purchaser of cloud services, as the cost of transit paid by Amazon or Google to the servicing ISP is generally protected under a nondisclosure agreement, making the business end of the process rather opaque. CloudFlare has offered a cautionary tale about the consolidation of ISPs, which in Australia, has allowed Telstra to charge transit rates well above those in other countries. ISPs in Europe have not generally been accused of using their position to charge transit rates substantially higher than in other markets, though the same logic behind “one currency, one market” could apply in this situation.

Share your experiences

Are you frustrated by the artificial limitations of paid streaming content based on physical location? Are you an American citizen living abroad facing these issues? Let us know in the comments section.

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