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How does netflix block VPNs?
Netflix doesn't block all VPN providers. It only limits the use of proxies and VPNs that are on the blacklist.
Chief product officer Neil Hunt at Netflix assured at the Globe and Mail that Netflix relies more on blacklists of VPN exit points and on proxy guys that hide the source.
For those who got on the blacklist, it's trivial to move to a new IP address and evade.
The vast majority of the content from Netflix is geographically restricted due to copyright agreements.
However, you may watch Netflix content primarily within the country in which you have established your account and ONLY in geographic locations where your VPN service offers its service and has licensed such content.
Not forgetting to mention, Netflix blocks connections from most VPN providers, but it does NOT penalize users who attempt to watch Netflix through VPN.