Media-hungry Canadians seek access to geoblocked Hulu, Spotify

Share

Being from Canada is great... most of the time.

If you've ever tried to access popular video-streaming sites Hulu and BBC iPlayer and music-streaming services such as Spotify and Pandora, you've probably been greeted with an apologetic - yet blunt - message telling you that, sorry, the service isn't available in Canada.

The most widely used term for this is geoblocking and it's a used by some websites and web services to ensure that only users within a certain geographic area can access content.

Initially, gambling sites employed geoblocking restrictions to stay within legal parameters but as on-demand video and audio streaming gained popularity, broadcasters began to use it to restrict access to television shows, movies and music offered online.

Broadcasters on both sides of the border are trying to recreate the existing boundaries of the real world into the digital world by using geoblocking to protect their rights and investments, says Alan Sawyer, a Toronto-based consultant who follows traditional and new media.

Hulu's business model is ad-supported and its American-only advertisers are "aiming for American eyeballs," so they're not interested in having Canadians tune in when there's no return on investment.

"It costs money to distribute content over the Internet because each stream has an incremental cost to it," Mr. Sawyer says. "It's not like the broadcast world where the signal costs the same whether one person or a million people are tuning in. American advertisers don't want to pay to have Canadians watching."

Sawyer also pointed out that Canadian broadcasters do the same thing, as TV shows available on video sites from CTV, CBC and Global, for example, are off-limits to anyone outside of the country's borders.

The overall challenge is that streaming video content online is still a money-losing proposition because the advertising revenue derived from it is not enough to cover the costs. Advertisers aren't willing to pay the same premium for online content that they would through traditional channels, and broadcasters aren't particularly eager to jump full steam into something that isn't profitable yet.

Targeted advertising, which is already taking place with banner ads on the Web, might loosen the shackles, but until the technology is perfected and the distribution rights are settled, the current ad hoc system of geoblocking will likely continue unabated. "Targeted ads are one of the biggest challenges for TV broadcasters right now, but the technology will be there to enable it online first," he says.

And for the moment, the CRTC isn't regulating video streaming and distribution on the Internet. After new media hearings held in February, the regulatory body still has to decide what it will regulate and exempt in new media moving forward. But Sawyer believes that while the CRTC may recognize that it's a "transitional time" where the primary method of consumption still remains traditional broadcasting, the shift to the Web will present challenges to it.

"It's very difficult to regulate this content on the Internet, but it's not impossible," he says. "The pendulum will shift, and delivery over the Internet will become a very significant, if not the primary, delivery mechanism for content. At that time, the CRTC will take a much more active interest in what's happening."

The upcoming Winter Games in Vancouver are a good example of geoblocking at work, says Michelle Warren, president of MW Research and Consulting. The International Olympic Committee (IOC) awarded Web streaming rights to CTV in Canada and NBC in the United States, but the deals are exclusive to each country's borders, so Canadians won't be able to view any of NBC's coverage and vice versa for Americans.

But this example extends to the daily fixture of content available on sites like Hulu, TV.com, Pandora, Slacker and Fancast, which is why users intent on gaining access are utilizing virtual private networks (VPN) to tunnel underneath the restrictions by masking their Canadian IP (Internet Protocol) addresses with proxy U.S. ones, Ms. Warren says.

"As long as there's geoblocking and people are told they can't access content and information, there will be a collective effort to access that data," she says. "Some will obviously try harder than others, and that's why there will be a need for tunnelling services to get to that content."

Though VPNs have typically been used by business road warriors to security connect with the office, these services and applications are also being used to circumvent geoblocking. Now that some sites, particularly Hulu, have caught on, Warren says that another "song and dance like music downloads and peer-to-peer networks" will likely take place with VPN applications and geoblocking sites. As one VPN service is blocked by Hulu and other sites, there will be something else to take its place, thereby continuing the cycle.

She adds that most users wouldn't be likely to do this if there was Canadian-equivalent to Hulu that could act as a repository for on-demand video. "A subscription model might work, but figuring out how the revenue pie will be split would take time," she says.

The Canadian broadcasters do offer many episodes of U.S. shows on their video streaming sites, but the quantity is limited and there isn't much in older shows, which is partly what is so appealing about Hulu's offering.