Most Netflix subscribers are well aware that just over the fence, there often sits a large library of movies and TV shows available to those national neighbor’s citizens. Specifically, the list of movies and TV shows on Netflix in the United States is considerably different than the library in Australia or Canada.
This is rarely determined by Netflix, but instead by the hundreds of content owners who essentially lease their content to Netflix to stream. For example, Sony Pictures might hold the content rights to a movie in the US, and thus sell those rights to Netflix to use in its US-only library. But in Canada, that same movie could be owned by another holding company, making it hard for Netflix to keep their library consistent.
Certainly, savvy Netflix subscribers have figured out ways around these content walls, through VPNs, and Netflix has largely turned a blind eye. If they get their monthly subscription payment from users, they don’t necessarily have an incentive to try and limit access to geo-blocked content, unless content owners put more pressure on them to do so.
This will however get complicated for content owners, who will likely have to rewrite a large portion of their licensing agreements, no easy task. This could result in some collateral damage if the proposal passes, as content owners might just decide to pull it from Netflix as opposed to try and work out these more complicated deals.
Netflix has always expressed interest in being able to offer a unified library of content, no matter the region. This has been one of the main reasons they have spent so much time focusing on developing their own original content library, where they hold all the rights to stream the content. This model enables them to create consistency internationally, which will prove valuable as they continue to expand into countries where their service is not currently available.