That’s a ridiculous statement to make, and has no basis in fact. The same server is serving me content in Toronto as is serving me content in Buffalo, and they’re both probably located in Cali.

The reason they have problems with content rights in canada is that the canadian media companies own the canadian rights to certain programs, for example Global TV owns the new simpsons brodcasts, when they are shown on TV the Fox station signal is overriden with the Global TV signal, the Global Commercials and all.

The region restriction is to lessen the strain on the servers to external regions. Also, these companies would need to have relay spots in the regions or towards these regions in order to efficiently offer content there.

This is to keep things reasonable, since these web sites are in their infancy. Let them mature and then they can move to providing content to the masses.