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Startup Markets Net-Spoofing Software To Bypass NBCU's Olympics Online

AnchorFree, a Silicon Valley startup backed by Goldman Sachs, is promoting ad-supported privacy software that lets users appear to be located in the U.K. in order to access live Olympics coverage for free via the BBC's iPlayer -- and avoid paying for subscription TV in the U.S.

In the past week, since the Olympics kicked off on July 27, AnchorFree has seen installs of its Expat Shield increase more than 20-fold in the U.S., according to vice president of marketing James Ryan.

Primarily, as its name suggests, the Expat Shield is aimed at U.K. expatriates who want to access geo-restricted content from back home. The software assigns users an IP address in the U.K., so they appear to be based in the country when in fact they could be anywhere in the world.

But AnchorFree has seen a sudden wave of popularity among Americans who are ineligible to access NBCUniversal's online coverage of the 2012 Summer Olympic Games because they don't have a pay-TV subscription, according to Ryan.

"There are a lot of people frustrated by NBC's online coverage," he said. Operators like Comcast are "trying to upsell you on a larger package" in order to watch the Olympics on the Internet, Ryan added.

AnchorFree currently has about 12 million users worldwide. Ryan declined to break out how many of those are in the U.S., or how many users in the States have signed up in the last week.

The use of the Expat Shield software to access iPlayer appears to be a violation of the BBC's terms of service, which say in part, "You may not access, view and/or listen to certain parts of BBC Content (such as video or live television services) using BBC Online Services if you are outside the UK."

A BBC spokesman declined to comment specifically on AnchorFree's software. "As the official Olympic broadcaster in the U.K., the BBC geo-blocks its online content, so that video and audio streams are not available to audiences outside the U.K.," he said.

According to Ryan, neither the BBC nor other U.K. content providers such as ITV have contacted AnchorFree about the Expat Shield service.

"Our position is, we're advocates of Internet freedom and free access to Internet content -- what our users do with it is up to them," Ryan said.

NBCU, asked to comment on AnchorFree's promotion of Expat Shield to watch the BBC's Olympics coverage, said in a statement, "More people are watching the Olympics on broadcast, on cable, and our digital platforms than ever before in the digital age. The IOC's technological and legal framework has been quite effective in policing unauthorized use across the board, and we will continue to work with the IOC as its approach to these issues evolves both during these Olympics and in the future."

On Friday, NBCU touted results of its "TV Everywhere" strategy for the 2012 Summer Olympics through Aug. 2, announcing that pay-TV subscribers have registered 6.2 million devices to access online and mobile video content. According to the programmer, through Thursday it has already delivered 34 million live streams from the 2012 London Summer Games -- more than the entire Beijing Olympics in 2008.

AnchorFree's Expat Shield is free for anyone in the world to use. The software includes a banner ad at the top of the page. AnchorFree sells a U.S. version of the software -- Hotspot Shield, which assigns users a U.S.-based IP address -- available in an ad-supported version and a premium version for $29.95 per year.

AnchorFree in May announced that Goldman Sachs invested $52 million in the company. Along with previous investors, including RENN Capital, the startup has raised $63 million to date.

Mountain View, Calif.-based AnchorFree positions its software as helping Internet users "in need of secure browsing, privacy and freedom online." The Hotspot Shield and Expat Shield products secure "all Internet communications and Web browsing and protects each user's privacy and identity online," the company says.