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Sony Pictures pressed Netflix to lock out 'illegal' overseas users

A leaked email from last year's Sony Pictures hack has revealed the studio lobbied Netflix to tighten restrictions on international users accessing the service "illegally," saying it was a form of "semi-sanctioned" piracy.

Paul Sakuma

A leaked email from Sony Pictures Entertainment has revealed the company lobbied Netflix to block overseas users from accessing the content streaming service "illegally" by circumventing geoblocks with VPNs.

The internal email from Sony Pictures Entertainment President of International Distribution Keith Le Goy was published on WikiLeaks as part of a cache of confidential information, which includes a total of 173,132 emails and 30,287 documents. The release followed last year's high-profile hack of Sony Pictures when a group calling itself #GOP, aka "Guardians of Peace," released sensitive information in an apparent bid to stop the release of the satirical film "The Interview."

In the leaked email published today in WikiLeaks searchable database, Le Goy outlines details of the private meeting which was held in order to "go through some issues" that Sony Pictures was "struggling" over with Netflix, including the issue of Geofiltering and VPN usage.

"Netflix do not closely monitor where some of their subscribers are registering from and don't take steps to counter circumvention websites that allow people in, for example, Australia, to sign up to the US or the UK Netflix service and subscribe illegally," Le Goy's email read.

"We have asked Netflix to take steps to more closely monitor circumvention websites," the email continued. "This is in effect another form of piracy -- one semi-sanctioned by Netflix, since they are getting paid by subscribers in territories where Netflix does not have the rights to sell our content."

Sent in November 2013, the email took issue with the fact that Netflix had not yet launched in Australia and therefore did not regional rights to distribute Sony Pictures content in the country. Prior to its March 2015 launch, it was estimated that as many as 200,000 internet users across Australia were accessing the US version of Netflix via a virtual private network.

Le Goy said Sony Pictures was pushing for tighter restrictions on overseas users, including limiting accepted payment methods, saying that services such as PayPal make it hard to determine where subscribers are based.

However, he added that "Netflix are heavily resistant to enforcing stricter financial geofiltering controls, as they claim this would present a too high bar to entry from legitimate subscribers."

"We have expressed our deep dissatisfaction with their approach and attitude," Le Goy wrote. "Netflix of course get to collect sub revenues and inflate their sub count which in turn boosts their stock on Wall St., so they have every motivation to continue, even if it is illegal."

Le Goy added that he was "sure other studios feel the same way" and that the issue was "certainly going to get more heated."

It's not the only instance of friction between Netflix and the rights holders that provide content for its service. Shortly after an Australian Netflix launch was confirmed last year, the country's home entertainment industry organisation revealed that studios were lobbying Netflix to block Australian users from the US version of the service.

Update 20 April at 10:30 a.m. AEST: Sony Pictures Entertainment and Netflix declined to comment.

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