Geofiltering: How to Alienate Business Customers Without Really Trying

Many a DVD collector over the years has been disappointed upon learning that their rare DVD from Taiwan or France can't be played on their American DVD player. Just as DVD region codes limit viewing to a geographic area, the geofiltering of web-based videos and other sites limits viewers from outside of a particular region from accessing them.

This technique is often applied to the Web sites of television stations (such as CBS, Hulu, and Netflix in the United States), gambling sites, and dating sites, as well as a number of U.S. and other military sites, but appears to be catching on in other realms.

In contrast to government-mandated filtering, geofiltering is typically applied for business reasons: typically as a defense strategy against spam or harassment.

In a recent post, Professor John Palfrey notes that Stylefeeder (a site which "discovers products for you based on your unique tastes") has been mulling over geofiltering since discovering that much of their spam traffic comes from India and Pakistan.

One solution to eliminating such spam is, of course, geofiltering. By blocking all users from countries like India, Stylefeeder could easily prevent spam from those countries without losing business.

But in the company's own post on the Stylefeeder Tech Blog, CEO Philip Jacob explains why Stylefeeder is choosing a different route. Jacob says:

"I felt that this approach, however, was too heavy-handed in that it was inevitably going to be a blunt instrument that caused a lot of collateral damage. Plus, we needed a solution for social media spammers within North America and those using proxies and cracked hosts, so it wasn’t going to save us much."

He goes on to argue that the long-term impact outside of North American and Europe in cases where geofiltering is applied could eventually affect businesses.

Indeed, though it might seem like a smart move for a business being hit by waves of spam and is often legally necessary for copyright reasons (i.e. Netflix videos are unwatchable outside of the United States as their licenses do not allow it), geofiltering creates a sense of mistrust amongst a company's users, who may feel they are being unfairly discriminated against.

As Jacob so succinctly puts it, the question is not who is to blame, but who suffers:

"Who suffers? Well, if country-level blocking was deployed by a large number of startups, it’s clearly the Indian non-spammer regular users who would suffer, at least in part due to actions of their own countrymen. When you look at companies like Friendster - with something like 80% of their traffic coming from outside the USA - you have to wonder if opportunities might be inadvertently lost. Or Orkut, which is hugely popular in Brazil. Whether explicit or not, most startups adopt a usage policy that keeps their sites open to the entire Internet and then add in specialized rules to limit access over time."