Blocking users from accessing Netflix via virtual private networks (VPNs) has not damaged the company's bottom line at all, CEO Reed Hastings has stated in his latest earnings call to investors.
"[VPN users are] a very small but quite vocal minority. So it's really inconsequential to us, as you could see in the Q1 results," Hastings said to investors, highlighting the fact that Netflix had seen net additions in memberships amount to a record 6.74 million, which surpassed the previous record set in Q4 2015 of 5.59 million.
VPNs are services that allow users anywhere in the world to connect to a private network on the internet. These are useful for online privacy, as they hide the user's actual location. However they can also be used to circumvent region restrictions on content – such as tricking Netflix US into thinking that foreign users are based in that country.
Users simply pay the US subscription fee and the VPN fee in order to watch what they like, as licensing agreements mean the US version of Netflix has much more content than the versions in other countries.
Following threats to do so in 2015, in January this year Netflix announced that it would be taking action to prevent users from using virtual private networks (VPN) to hide their geographic locations in order to gain access to content that is not available to their locale, since Netflix is now available in 190 countries.
"Some members use proxies or 'unblockers' to access titles available outside their territory. To address this, we employ the same or similar measures other firms do. This technology continues to evolve and we are evolving with it," David Fullagar, Netflix's VP of content-delivery architecture, wrote in a blog post on 14 January.
"That means in coming weeks, those using proxies and unblockers will only be able to access the service in the country where they currently are. We are confident this change won't impact members not using proxies."
However, it seems that even though users are angry about not being able to access Netflix's US services, they are still willing to stay with the service and make do with the content available in their own countries, showing that threats by users to boycott the service and turn back to online piracy are for now having very little effect.