The widespread use of Virtual Private Networks (VPNs) to access US-geo-blocked content from the likes of Netflix, Hulu and others has received significant attention in the last few weeks.
While most of the conversation has been focused on whether or not using VPNs to access content from outside a territory that has been licensed to is legal or not (not surprisingly), the real issue slowly getting attention is that the widespread adoption of VPNs is a loud evidence of the online demand for video content not being properly satisfied by the existing supply.
Many US movie studios and TV producers seem to be stuck to a dated geo licensing process that grants without much though full exclusivity on online distribution rights to overseas TV broadcasters (on a show by show and country by country basis). This practice does not seem to challenge the virtues of what international licensees offer to them that they could not do on their own to reach viewers online. In my view the parent companies of CBS, NBC, CBS, Fox as well as HBO, MLB, FIFA, ATP, Formula 1, etc. they are all leaving money on the table by not going direct to viewers online regardless of where they are. The good news is that slowly (veeery slowly) but surely they are all finding this out.
Now, the consequences of this for the “vertically integrated” media companies (VIMCs) in Canada will be profound. In Canada being vertically integrated media company means that the company with “distribution rights” also owns the distribution channels. Do note that in Canada, the shows enjoying the most eyeballs (by an enormous margin) are licensed shows from the US. What VIMCs in Canada own are the rights to commercialize and air their shows locally through multiple channels for the duration of the license. They do not own the content; CBS, Disney & Comcast do.
And with this, VIMCs in Canada are left only to battle online others online in a leveled playing field where owning over the air broadcasts licenses provide no advantage whatsoever online.
This is still being sorted out and it will likely take years to materialize.
