The latest data leaked from Sony Pictures Entertainment by hackers reveals that Sony executives had accused Netflix of breaching its licensing contract for Sony Pictures Television (SPT) shows by allowing customers in foreign markets to use virtual private networks to stream them, calling it piracy that is “semi-sanctioned by Netflix.”
Sony pressed Netflix for increased “geofiltering” control over its customers to prevent the practice, including restricting payment methods for the service to ways that would allow screening for customers living outside countries where Netflix had contractual rights. The move came as Sony was positioning to merge its own streaming offerings and other digital products into a “One Sony” digital operation to better compete with other services.
In November of 2013, as Sony Pictures Television was negotiating with Netflix over licensing of content—specifically, rights for Breaking Bad—the company’s president of international distribution Keith LeGoy e-mailed Sony Pictures Television President Steve Mosko to update him on the proceedings. The deal was important to Sony—SPT execs believed it would bring in $41 million in the 2014 fiscal year. In another e-mail to Mosko, SPT Executive Vice President and Chief Financial Officer Drew Shearer had emphasized, “We need to deliver the Netflix BB deal in FY14 like we thought or $41mm goes bye-bye from FY14.”
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