It appears that if the country code is off or the ESN is not right this happens. There's also some collusion where a maker gets a piece of the action from Netflix for each (paid) playback.
At risk of upsetting the thugs out there, the story behind all this may be all about money.
Besides, given LG's penchant for peeking at your data I'd avoid this make till they come clean.
Read -> http://bgr.com/2013/11/20/lg-smart-tv-spying/
Be warned: this product is advertised EVERYWHERE as coming pre-loaded with Netflix (and Netflix do support the device: https://support.netflix.com/en/node/489) however the app is missing from these devices. After extensive research and putting a great deal of pressure on LG one of their customer services operators finally admitted that they are having issues with this app and are working to get this fixed - but this isn't their official line on the matter. They will tell customers that Netflix do not support the device.
DO NOT BUY this product. LG are not taking responsibility for the issues here and are trying to pass the buck onto Netflix who have confirmed they DO support the device.