But there's a much simpler solution with no chance of a false positive [0]: Netflix spends a few dollars signing up for each advertised VPN service, then they instantly block any IP address that the VPN service attempts to route them through.

[0] As long as legitimate Netflix customers aren't sharing their connection with the VPN provider.

If you suddenly see 500 different accounts all connecting from the same small block of IP addresses and most of them use out-of-country credit cards, blocking that IP range would be a logical conclusion. This could be managed automatically (or at least alerted to a human to check) with not much effort.

Just my speculation.

I can't access Netflix from a U.K. data center connection even tho I have a U.K. account because it detects it as a non residential IP address.