The launch of Netflix in South Africa brought welcome international competition to the local video entertainment sector.
However, its South African services are priced in US dollars and cost the same as subscriptions in the United States.
Existing subscribers from South Africa who used unblocking tools to access Netflix’s US catalogue therefore had little incentive to switch to using its SA service.
A week after its global launch, Netflix published a post on its blog titled Evolving Proxy Detection as a Global Service.
Netflix said it was evolving its geo-blocking systems, and subscribers using unblockers would only be able to access the local content library of the country they were situated in.
At first, not much changed for South African subscribers. Around the beginning of March, though, UnoTelly and Unblock-Us users started reporting that Netflix was throwing error messages.
Back to piracy
Users affected by the crackdown tried different unblocking services. NordVPN was among the alternatives proclaiming it was unaffected by the crackdown and had a backup plan in place in case they were hit.
Others gave up trying to get their unblocking services working again, and announced they would cancel their Netflix subscriptions.
Instead of jumping through hoops to pay for the content they wanted to watch, they said they will download shows and movies over unlicensed channels – such as BitTorrent.
Online petitions were also started, along with calls for a boycott.
Weaker subscriber growth
In its results for the first quarter of 2016, Netflix told investors to expect fewer new subscribers in the second quarter than it added between January and March.
“Our international forecast for fewer net adds than prior year is due to a tough comparison against the Australia/New Zealand launch,” said Netflix.
Netflix CEO Reed Hastings said its guidance for Q2 2016 had nothing to do with its aggressive blocking of virtual private network and proxy users.
“All that change was in the first quarter,” said Hastings, adding that it’s a very small but quite vocal minority complaining about the changes and threatening to leave.
“So it’s really inconsequential to us, as you could see in the Q1 results.”