Will Slingshot’s Global Mode Affect the VPN Business?

Earlier this week, the New Zealand ISP Slingshot made some headlines across tech blogs over its newest feature, Global Mode, a VPN-like function that would allow users to access sites like Netflix and Hulu.


Photo: Toria / Shutterstock

Netflix still hasn’t launched in New Zealand. This is the type of situation that VPN providers wait for, as it’s a great selling point, allowing users to access services that they otherwise couldn’t get. But what happens when an ISP starts offering a similar service that is built-in? Slingshot has been praised by consumer rights groups and has now even started accepting bitcoin for payment, much like many VPN providers.

“The main concern from our perspective is that the ISP is not bringing privacy to the customer as the DNS requests will almost assuredly be monitored and logged,” says Lawrence Traynor, Director of Communications at IPVanish.

“Going through their website, it appears that Slingshot is not offering a VPN but merely a DNS service that can fake the location and change the requests,” add BolehVPN’s co-founder Reuben Yap. “This doesn’t encrypt your traffic but is perfect for streaming purposes since it suffers no loss in speed from your regular internet connection.”

The news from Slingshot has ISPs in neighboring Australia talking too as it still has not seen Netflix launch in the country. Choice consumer group said it was exactly what ISPs should be doing.

“This is exactly the type of service Australian consumers should have access to,” a Choice spokesperson said.

“Choice research continues to show consumers are paying approximately 50 per cent more for digital products and services than consumers in the US and UK.”

It may not be all rosy though as Hulu recently blocked VPNs and have yet to respond the possibility of ISPs allowing access to users outside its current offerings.

“I would be very interested to see how Netflix and Hulu respond to this especially when Hulu has recently taken a strong stance against VPN services,” says Reuben. “When ISPs start openly advertising this, geo-restricted sites can either just further lock down their systems (which is what Hulu has done) or expand their licensing rights to be available to more countries hence negating the need for such DNS trickery especially when services such as Netflix do charge members a fee so it’s not as if the content providers are losing revenue.”

Slingshot may end up taking advantage of the current situation until Netflix actually launches in New Zealand, at which point Global Mode may not have the same appeal to new customers.

Reuben goes on to explain that there should be some concern over security and privacy if more ISPs start offering this service. “In general, ISPs offering VPN services is probably not a good idea since you generally want to split the entity of who you’re trying to protect from,” he says, “and the person provided you the security so even if ISPs started implementing in-built VPNs, I would be rather cautious in trusting them with my security.”

“ISPs are prime targets for mass surveillance and it makes little sense to entrust the running of a VPN to them as well. As such, I think if and when ISPs start offering VPNs, it has minimal effect on VPN providers in the long term depending on their marketing angle and their customer mix. BolehVPN’s focus has been security and privacy and freedom from internet filtering or selective bandwidth throttling so I’m not particularly concerned of its impact to us. In fact, it probably would help the public get better awareness of what a VPN can do.”

Could this affect the VPN business moving forward, if people can access geo-blocked sites by default when they sign up for an ISP?

“Specifically in relation to Slingshot’s Global Mode, I do think it’s an interesting way to differentiate their product,” concludes Reuben, “but I doubt it’ll have any significant impact on our business model though it might spur sites such as Hulu and Netflix to further up their geo-location checks.”

IPVanish’s Lawrence is a little more welcoming on the other hand, adding: “We’re pleased to see that an ISP committed to bringing a free internet to all its customers and hopefully more will do so.”