Netflix and HBO border-hopping: Is anyone getting caught?

On any given night, thousands of Canadians are breaking the rules set out by Netflix and other online video streaming services.

They're watching content restricted to other countries, such as the original Star Trek series or Skyfall — the latest James Bond movie, available on Netflix U.S. but not in Canada.

The globetrotters are aided by a growing number of unblocking companies that provide the tools to sneak across virtual borders.

People around the world are signing up, especially those in countries with limited program selection.

Industry stakeholders are on edge. For example, HBO Now, home of the hit show, Game of Thrones, recently sent out warning letters to foreign subscribers. It told them to stop accessing its American-only streaming service.

It's not clear if anyone has faced any real repercussions. But what is clear is that the cross-border watching business continues to thrive.

Virtual border-hopping services

UnoTelly in Toronto describes itself as a "virtual travel service." For $4.95 a month, it provides the tools to enable subscribers of streaming services to watch another country's content.

"We're kind of like a middleman," explains founder Nicholas Lin.

He says subscribers' top pick is Netflix. As with many streaming companies, border hopping violates Netflix's policy, because content licensing agreements vary between countries.

The company puts up virtual walls to prevent viewers from straying. UnoTelly helps subscribers get around those walls by using technology to virtually relocate them.

For example, a user in Canada will appear as though she's in the U.S. so she can access U.S. Netflix.

"It's like a pipeline working in between there, so you are kind of virtually travelling to the U.S.," explains Lin.

He says business has been growing quickly with customers across the globe.

Lin has no qualms about what he offers. "There's nothing we're aware of that points to anything that would prevent the use of virtual travel services to access content," he says.

The federal Department of Canadian Heritage tells CBC News that the Copyright Act does not explicitly cover the use of virtual border-hopping services, and that the issue has never been tested in Canadian court.

As far as breaking Netflix's rules, Lin says he's only helping viewers cross borders. What they do next is up to them.

It's just so easy

"Changing the regions on Netflix is really quite simple," says Torontonian Darren Smith. He uses another thriving unblocking service, Unblock-Us. It originated in Toronto and has now relocated to Barbados.

"What kept me from moving to Netflix for a very long time is that the Canadian version is very limited," explains Smith.

But now that he has the tools to border-hop, he finds himself accessing Netflix in countries across the globe. "It's mind-blowing," he says.

His daughter wanted to watch the vampire-themed Twilight movies. They aren't offered by Netflix Canada or U.S., but Smith found the flicks in Mexico.

"There's actually English programming on Netflix Mexico that you can't get here," he says.

His family also watched the American movie The Mummy by accessing Netflix in the Netherlands.

"As far as I know, I'm not doing anything illegal," says Smith. But he is violating Netflix's policy.

"We employ industry standard measures to prevent this kind of use," Netflix spokeswoman Erin Dwyer told CBC News in an email.

Yet Smith says he's never experienced repercussions. Both UnoTelly and Unblock-Us say, as far as they know, their customers have never received any threats.

Netflix acknowledged last year that it had "done nothing new recently" to crack down on cross-border watchers, and likened detecting them to "playing a game of whack-a-mole."

What about content providers?

Content providers, the ones who sell shows to services like Netflix, are growing frustrated.

According to Sony Pictures emails leaked following a recent cyberattack, company executives complained that Netflix wasn't doing enough to stop abusers. One suggested the company "semi-sanctioned" border hopping, because it led to more Netflix subscribers.

​"Netflix can and should do a much better job," charged another executive in a late 2013 memo.

Netflix did not respond to CBC News's request for comment on the emails, published by WikiLeaks.

Technology law expert Michael Geist says even content rights holders like Sony could do more to stop cross-border watching, if they really wanted to.

The University of Ottawa professor points to a discussion in the same 2013 email where the executive advises that Sony secure its deal with Netflix for the TV show, Better Call Saul, before confronting the company on border-hopping.

"It's pretty clear [Sony] wants to sell to Netflix, so the extent to which this is seen as an issue, it's pretty clearly a secondary issue relative to the revenue that services like Netflix are generating for them," says Geist.

Geist also says everyone recognizes that cross-border watching is better than illegal downloading because money is still changing hands.

"Rights holders are being paid, consumers are paying for the content. If there was really that big of an issue, the rights holders would take steps to stop it from happening," he says.