Quickflix tells Netflix to “play by the rules”

Australian streaming content provider Quickflix has lashed out at US streaming giant Netflix, suggesting it set up shop in Australia or close its “back-door” service which enables Australians to hide their IP address.

An estimated 200,000 Australians are subscribers to Netflix through strategies such as virtual private networks that mask IP addresses and get around geo-blocking.

Quickflix CEO Stephen Langsford wrote an open letter (see below) to Netflix CEO Reed Hastings saying, “Be honest and face up to the issue of unauthorised access to your US service. Have the courage to limit your service only to the territories where you have legally obtained the rights to operate by abiding by the geo-filtering obligations required by your content license agreements. And do so immediately.”

Sydney-based Quickflix first launched in Perth in 2003 offering DVDs via post but added streaming in 2011.

Last week, Foxtel CEO Richard Freudenstein also told ZDNet that content owners had to push Netflix to stop accepting Australian credit cards, because Netflix doesn’t own the rights to show that content in Australia. He stated that the US streaming giant is exploiting the rights that Foxtel is paying for.

Netflix, which is currently focussed on European market launches, is tipped to arrive in Australia in 2015. As well as producing shows such as House of Cards and Orange is the New Black, it offers streaming movies and TV shows for around $9 a month.

Dear Mr Hastings,

If you want Netflix to compete in Australia come through the front door.

Instead you’re currently enjoying a free ride in Australia ignoring unauthorised “back door” access to your US service and thereby taking revenue away from local services which are investing to service the local market and endeavouring to provide choice and competition to consumers.

Netflix not only knowingly collects revenues from subscribers with unauthorised access to your US service, investing nothing in the Australian market nor paying for Australian rights to the content you make available, but also tacitly encourages Australian consumers to inadvertently breach the copyright of the content owners.

Unlike yourself, Quickflix has obtained all necessary Australian rights to the content on its platform, faithfully meets all necessary security requirements, including geo-filtering imposed by the content rights holders, and continues to reinvest in its service with the goal of offering the very best service in the market to its customers.

Quickflix is growing its streaming service and is by far the most accessible streaming service in the market with Australian customers having access through almost half a million registered devices including smart TVS, game consoles, mobiles and tablets. But if Netflix continues to filch revenues through allowing unauthorised access, Quickflix and other local services will not be as viable as they could be nor compete as vigorously as they could. Without strong local competition Australian audiences will suffer in the long run with fewer choices, less compelling offerings and higher prices.

So Mr Hastings, we challenge Netflix to play by the rules. It’s how we do it here in Australia.

Stop turning a blind eye to the VPN services acting as a gateway to your service. Be honest and face up to the issue of unauthorised access to your US service. Have the courage to limit your service only to the territories where you have legally obtained the rights to operate by abiding by the geo-filtering obligations required by your content license agreements. And do so immediately.

Quickflix is pro-consumer, pro-competition, and pro-Australia. Should you decide to enter Australia through the front door, Quickflix will be happy to compete with you, fairly and squarely.

Yours sincerely,

Stephen Langsford

Chief Executive Officer

Quickflix Limited

Source: Mumbrella