Accessing U.S. Netflix is ‘stealing,’ new Bell Media president says

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The head of one of Canada's largest media companies has taken a bold stance on piracy, equating the use of workarounds to get access to content not available in Canada to stealing.

In her first public speech at the helm of Bell Media, Mary Ann Turcke emphasized the need to make it easy for viewers to get access to content in compliance with copyright laws, but revealed no plans to open the company's CraveTV video streaming service to non-television subscribers.

Ms. Turcke recounted a story about her 15-year-old daughter using a virtual private network (VPN) to make it appear as if her Internet protocol (IP) address was coming from the United States in order to gain access to Netflix Inc.'s U.S. content catalogue.

"She is 15 … and she was stealing," Ms. Turcke told an audience at the Canadian Telecom Summit in Toronto during a lunchtime speech. "Suffice to say, there is no more VPNing."

Ms. Turcke was named president of Bell Media in April following Kevin Crull's departure from the company after he intervened in news coverage at Bell's television stations. Bell owns CTV and numerous specialty channels, including TSN, as well as 30 local television stations and 106 radio stations. (BCE owns 15 per cent of The Globe and Mail.)

After outlining the Canadian and international programming Bell Media is showcasing this week during the annual "upfront" presentations to promote the upcoming television season to advertisers, Ms. Turcke said that high-quality content is merely the "price of admission."

"We, Bell Media, we, the industry, need to make our content more accessible," she said. "Viewers are demanding simplicity. And they will seek it out.

"Distinctions between linear [broadcast television] and online-streaming rights, distinctions between 'windows' [for theatrical, DVD, broadcast and Web release] and, of course, distinction between national borders is not something our consumers are willing to tolerate. It is enough to drive anyone to the dreaded Netflix. Legally or illegally."

However, Ms. Turcke stopped short of saying the company would make CraveTV available to anyone in Canada who wanted to subscribe to it. As it stands, CraveTV – which features exclusive content from HBO and Showtime – is available only to television subscribers of Bell and other TV distribution companies with which it has signed agreements.

Last week, Rogers Communications Inc. and Shaw Communications Inc. said they would make their joint-venture video-streaming service Shomi available directly over the Internet at some point this summer to anyone who wants to subscribe. Bell Media said at the time that it had no plans to change its business model with respect to CraveTV.

Ms. Turcke emphasized that no one producing content works for free, and argued: "We have to work together as an industry to make sure people understand the value of creative content."

But she called it a "cop out" to look to the federal government or the Canadian Radio-television and Telecommunications Commission (CRTC) to solve the problem and said the industry should instead promote behavioural change.

"We have to get engaged and tell people they are stealing," she said, bemoaning the fact that even mainstream newspapers feature "how-to" articles instructing readers on "how to get around copyright law."

Ms. Turcke's predecessor, Mr. Crull, also voiced frustration at the widespread circumvention of territorial rights. In an interview last January, he told The Globe and Mail he believed Netflix is "complicit" in letting users skirt territorial rights.

"This is an industry that has spent the last 30 years maniacally protecting intellectual-property rights. Digital-rights management is one of the most sophisticated and heavily negotiated relationship aspects of our deals with Hollywood. As an industry, the players up and down the value chain can't allow Netflix to continue doing what they're doing, and Netflix has a choice to stop it."

Suggesting Netflix is choosing not to enforce territorial rights for fear of alienating customers, he added: "This is a business model decision on Netflix's part. It's not a technical problem."

For its part, U.S.-based Netflix noted in its most recent quarterly letter to shareholders that: "Piracy remains a considerable long-term threat, mostly outside the U.S."

But the company has also argued that cracking down on the use of technologies that get around country locks is not as simple as some assume. No digital-rights management (DRM) system is impregnable, and many users pay for their accounts using PayPal or Netflix gift cards, making their location harder to pin down.

Netflix's solution is ambitious, if not utopian: Secure global rights to content so that it can be made equally available to anyone subscribing to its site. This is already the case for Netflix's original shows, but is an expensive proposition for programs it buys from other producers.

In the meantime, the use of VPNs and similar technologies that obscure a user's true location remains a major challenge for the industry. Last year, 22 per cent of Canadian Netflix subscribers reported using an U.S. IP address, according to research conducted on behalf of CTAM Canada, a cable industry association.

"What we're able to pay for a show in Canada is going to be dependent on how well protected those things are," David Purdy, senior vice-president of content at Rogers, said in a February interview. "Piracy or VPNs obviously hurt our ability to pay more."