The reasoning of OP makes sense in the light of the latest Netflix changes.
What those streaming services don't want is people sharing their account with friends.
One way to verify this is to determine the location of the client hardware. Fitting a GPS receiver is cheap and would provide excellent location data.
However, this would not work for lack of reception, as already mentioned.
But the location can be determined through WIFI network recognition, too, though not as accurately.
Anyway, when I read the starting post, I was wondering that a GPS was indeed the case until I thought about reception. This means we are closer to this dystopian future than we might think.