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  (Source: Orion Pictures)
For many customers, HBO refuses to offer any legal option to access its content, while pushing harsh penalties for those who steal it

Time Warner Inc.'s (TWX) network cash cow HBO (Home Box Office) has convinced some to "cut the cable" (cable TV cable that is... you need internet still) by signing up for HBO Now -- a $15 USD/month subscription service.  The service gives you access to all the most coveted content at cable television's oldest network.  That includes the most pirated show on the internet -- Game of Thrones.

I. Of Streaming and VPNs

After its March 9 unveil at Apple, Inc.'s (AAPL) Apple Watch launch event, HBO Now went live on April 7 -- just in time for the Sunday, April 12 premier of Game of Thrones.  So just how many people signed up for the service?  It's hard to say, but it's likely no more than a couple million initially, given that most users will need an Apple device to access it and only so many own a compatible device.

If you don't own an Apple device, the only way you're going to get access is if Cablevision Systems Corp. (CVC) happens to provide services in your area.  Cablevision is the first cable internet provider to bite on Time Warner's offer in that space.  It allows its cable internet users to directly subscrible to HBO Now on settop boxes, without a cable TV package.  When you consider Cablevision only has a couple million internet customers, though, it's clear access is still pretty limited.

HBO Now
[Image Source: The Verge]

Now there's yet another hoop you have to jump through -- U.S. residency.  HBO Now is currently a U.S. only service.  Outside the U.S. it would be an attractive option, given that even as close as Canada there's regions that don't have a cable provider offering HBO.  Overseas -- in Europe, for example -- HBO access is even harder to come by.

But like most streaming services including Netflix Inc. (NFLX) and Amazon.com, Inc. (AMZN) international uses is verboeten.  To be fair, this prohibition isn't entirely Netflix, Amazon, or even HBO's fault.  Some of it comes down to local copyright licensing deals.  Locally different companies may license certain content that is licensed by these popular streaming services in the U.S.  To allow free international access to the U.S. subscription service would seem to amount to breaching those local licensing deals.  So it's not allowed.

No problem right?

Traditionally Netflix and Amazon have cast a somewhat blind eye to the use of VPNs.  VPNs allow a customer to subscribe in the U.S., connect via a U.S. proxy server and then route the traffic back home -- wherever "home" happens to be.  In recent years Netflix and Amazon have faced increasing pressure to detect and terminate VPN use.

VPNs
How VPN works [Image Source: Private Internet Access]

That said, it remains possible -- if a bit risky -- to subscribe to these services and route traffic, particularly if you use a small-scale VPN (e.g. a friend offering a home server or a server at a business you own to act as your proxy).  Technically speaking such uses are probably less than legal, but most would agree they're ethically less brazen than overt piracy.

Unsurprisingly HBO Now quickly saw a number of foreign subscribers pop up via VPNs.  Some customers sent examples of these threats to TorrentFreak.  The notices threaten customers routing via known VPNs to either prove they have a U.S. residence or get booted.

HBO Now -- TorrentFreak
An example of the warnings HBO is sending HBO Now subscribers accessing service via VPNs.
[Image Source: TorrentFreak]

For some American expatriots or for foreigners who own U.S. residences, this may not be a dealbreaker.  But to some in Europe, Canada, and elsewhere who have no residence in the U.S. this may be game over.

II. HBO to Foreign Subscribers: Sorry, You're Screwed

These disconnections will likely leave a foul taste for some for a couple reasons.  First, where as Netflix and Amazon license most of their streaming content, Time Warner owns the rights to most of the content distributed by HBO Now.  So technically if it wanted badly enough to, it could probably pressure licensees (e.g. foreign cable TV networks, etc.) to accept its streaming service.  (Netflix and Amazon have a more defensible argument as they don't directly own most of their streamed content and hence can't directly negotiate with local licensees in cases of conflict.)

Second, where as some (if not all) of Amazon and Netflix's streaming libraries are available from other legimate sources in most regions (optical media sales, local cable TV networks, local streaming service providers, etc.), customers in many countries have no way to legally access HBO.

That brings us to the most compelling -- and infuriating point -- why would HBO turn away customers in regions with no current content licensing deals/options?  Why disallow such customers from legally purchasing content?

HBO -- Game of Thrones
For many foreigners HBO offers no legal option to watch its shows like Game of Thrones, whilst hiding behind punitive piracy punishments. [Image Source: HBO]

Time Warner (and HBO) representatives would likely defend the stance by suggesting that even if there's no current licensing deals in the region, that might not preclude future licensing deals.  But from a pragmatic perspective many foreign citizens at present have to chose between either pirating HBO's content or living without it.

That's a frustrating choice for a couple reasons.

First, many ethically many appreciate that while piracy (illicit copying) may not be quite the equivalent of physical stealing (given that physical stealing takes away the theft victim's ability to sell the stolen item where as illicit digital copying does not) it's also somewhat immoral.

Second, while many regions (e.g. China) cast a blind eye on piracy against U.S. content providers or even endorse it, older trade allies such as most foreign countries in North America and Europe often deliver relatively punitive punishments to pirates who illicitly view content owned by U.S. rights holders.  To that end, while Time Warner practices a relatively laissez-faire attitude when it comes to domestic piracy (which it views as "free promotion"), overseas pirates in nations like Canada, Sweden, or Germany may face fines or even prison time.

South Park piracy raid
[Image Source: South Park Studios/Comedy Central/Viacom]

So in summary, cutting off foreign VPN users is especially painful as they have no other legal option in many cases, and face far greater risks if they turn to piracy instead.  And worst of all, this sad state of affairs appears largely punitive as Time Warner owns most of its streamed content and could offer the service overseas with a bit of local negotiating.

In layman's terms if you want to view HBO shows in many parts of U.S. or North America "you may be screwed."  And it's HBO that's arbitarily choosing to force foreign customers to choose between legally risky piracy or simply boycotting its content.

Source: TorrentFreak





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