In the updated rules the company says "You may view a movie or TV show through the Netflix service primarily within the country in which you have established your account and only in geographic locations where we offer our service and have licensed such movie or TV show". Which is fine, and basically means you can use the service when you're travelling.
Basically, if you circumvent the geo-restrictions using a VPN, Netflix is entirely within its rights to end your service. Of course, it doesn't take an idiot to work out that Netflix has no interest in cutting people off and depriving itself of valuable customers. This clause is to appease the movie and TV studios who cut complicated rights deals across the world to show content in various regions.
Who benefits from this nonsense?
And honestly, even they probably don't care all that much. But somewhere, deep with in every movie studio, TV production company and TV network there sits a team of expensive lawyers who must, each month, bill their time to some project or other.
Frustratingly, they lean on Netflix to badger its users about them paying to watch content. So if Netflix does get forced to cut you off, there's a good chance you'll start getting your TV shows and movies from torrent sites. Which, apparently, is what the lawyers want.
We contacted Netflix for comment and will update when we hear more.
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