The irksome discrepancy between Netflix U.S. and Netflix Canada

If there’s one universal truth for Canadians, it’s that we don’t like to feel second tier to our neighbours to the south. And that extends to our Netflix-binging habits.

Maybe that’s why Bell Media’s new president Mary Ann Turcke faced quite a backlash when she shared her thoughts on Canadians using virtual private networks (VPNs) to trick streaming services into thinking they were stateside.

“It has to become socially unacceptable to admit to another human being that you are VPNing into U.S. Netflix, like throwing garbage out your car window — you just don’t do it,” Turcke told a Toronto telecom conference last week. “We have to get engaged and tell people they are stealing. When we were young and made the error of swiping candy bars at the checkout of the grocery store, what did our parents do? They marched us back in, humiliated us, told us to apologize to the nice lady and likely scolded us on the way home.”

Unfortunately, many Canadians seem to disagree or at least ignore the moral fallibility of a little IP address switcheroo in the name of more variety.

A recent survey, found that nearly a third of Canadians admitted to using virtual private networks to tap into the video-on-demand options south of the border. For Netflix in particular, that number rose to 40 per cent with Canadian Netflix users sneaking through a U.S. IP address to have visually feast on the cornucopia of options offered to our compadres to the south.

Is it really that surprising?

According to the site Netflixable, as of mid-May, Netflix Canada played host to 4,575 movies and shows versus the U.S. version’s 8,987 options.

The culprit for the discrepancy – regional licenses, says Michael Geist, Canada Research Chair in Internet and e-commerce law at the University of Ottawa.

“Legally the difference is a matter of the licenses, Netflix has licenses for some content that is globally offered across all the servers, some U.S. only and some Canadian only,” he says. “The larger library in the U.S. reflects presumably an ability to get licenses for content they weren’t able to get or didn’t want for Canada.”

It seems straightforward but when you consider that pretty much every one of those shows or films on your Netflix is tethered to a regional license – not to mention a time window for how long Netflix has access to that particular video – the system betrays an unreasonable amount of working parts.

“Our licensing is generally time-based, at the time of renewal, we evaluate how much the title is getting viewed as well as member rating feedback to determine how much we are willing to pay,” explains Erin Dwyer, Netflix’s North America Media Relations Manager, in an email. “How many similar titles we have is also a consideration.”

And the streaming scene is only getting more convoluted. Sites like Hulu and Amazon have started adding their own original content into the mix, while telecom giants Rogers and Bell have added their own video on demand services like Shomi and CraveTV.

It’s made for some interesting partnerships that further complicate the licensing world and fueling the divide between American and Canadian options.

Case in point – Between, a survival thriller created by Netflix, Rogers and Shomi. In Canada, Between premiered on CityTV and also streaming week-to-week on Shomi. Internationally, the show is available on Netflix, with new episode popping up weekly. The show doesn’t come to Netflix Canada until a year after the premiere.

Another prime example is Netflix’s original series From Dusk Till Dawn based on and directed by Robert Rodriguez. The show is available on Netflix Canada and internationally but only on Rodriguez’ El Rey network in the U.S.

“We compete for a share of members’ time against linear networks, pay-per-view content, DVD watching, other Internet networks, video games, Web browsing, magazine reading, video piracy, and much more,” says Dwyer adding that as a curated service, content will appeal differently to different regions. “In Canada, as with all regions, our focus is on providing members with a wide variety of content to meet the tastes of our diverse subscriber base - from families with young kids to working adults and everything in-between.”

As for when your favourite shows only available stateside but will appear north of the border – license gathering is an ongoing process.

“Just as new content is always being added to the service, we are constantly evaluating licenses for TV shows and movies,” she says.

In the meantime, Geist doesn’t suspect Netflix to crack down on VPNs.

“It’s a breach of contract with Netflix but Netflix doesn’t seem to be interested in enforcing those particular terms, they’re happier with the subscriber,” he says. “There is an argument that it’s a circumvention under copyright law but again it would fall to Netflix to try and enforce that.”

Fundamentally, content owners would need to illustrate that they’re bothered by the use of VPNs to convince Netflix to do something about it.

“Netflix has proven hugely popular and I think it’s a win for all the players – Netflix makes money, consumers get access to content and creators get paid by licensing their work,” adds Geist. “At least to date it would appear content creators are much more interested in licensing content to Netflix than urging it to block VPN usage.”