As many as 30,000 New Zealanders are believed to have subscribed to United States online television service Netflix, even though Kiwis are not supposed to watch it.
Netflix has 48 million subscribers in 40 countries but is not allowed to offer its massive collection of television shows and movies in New Zealand because it does not own the local rights.
Its website is blocked in New Zealand and subscribing from here is a breach of Netflix's terms and conditions.
A growing number of New Zealanders have been bypassing its block and subscribing anyway, using online services that disguise their computers' locations and make them appear as if they are in North America or Europe.
Nicholas Lin, the chief executive of one such service, Toronto-based UnoTelly, estimated that between 20,000 and 30,000 New Zealanders had subscribed to Netflix. Just under 1 per cent of UnoTelly's customers were Kiwis, he said.
The underground use of Netflix became stark this week when Netflix tweaked its computer system, cutting off some New Zealand subscribers.
The disruption prompted a flurry of anxious postings to social media and online bulletin board Geekzone. Telecom, Vodafone and Slingshot all made changes within days to restore access for their customers, Lin said.
A 23-year-old Netflix fan in Auckland said he subscribed because it provided programming that was either not available or was more expensive to view through a Sky Television subscription.
"There's kids shows, there's adult shows and movies and it's got the back catalogue that you'd normally have to go to the DVD store and rent out, like all of Breaking Bad.
"I would never subscribe to Sky. Unless you are really into sport, I don't think Sky has any value."
Sky Television spokeswoman Kirsty Way said some programmes on its premium Soho channel were not available on Netflix.
"We appreciate Netflix is a convenient and good service but customers are paying a big American company that does not pay for content rights in New Zealand.
"That affects not just Sky but our free-to-air networks and their leading dramas as well," she said.
Shortland Chambers intellectual property expert Kevin Glover said it was a grey area whether people who fibbed about their country of residence when subscribing to a service such as Netflix could be infringing copyright.
No such cases had gone to court.
- © Fairfax NZ News