Geoblocking
You know the deal, All of a sudden a screen comes up telling you something you want to view is 'not available in your region'. That news item a friend from abroad sent you the link to is unreachable, or you can't watch that BBC documentary you wanted to, while it is recommended everywhere.
The answer to the question of how this can be done is 'geoblocking'. Entertainment companies in particular have a hand to offer their films, music or documentaries per region to consumers, and to exclude others. Usually this choice for a geographical distribution of content has to do with the form of subscriptions to services such as Netflix, HULU or BBC iPlayer: in one country subscription costs are sometimes slightly higher than in the next, and in the other country because of the language the offer is just different, and otherwise it is a rights issue: for example, Netflix may broadcast from Disney Star Wars: Rogue One in the United States, but not in the Netherlands.
IP-address
Reason enough for companies to distinguish between subscriptions per region. And technically it is no problem for these companies to divide the world into regions. Every computer has an IP address from which a computer can read where it is located and with which internet provider and server it works. That makes it a job of not labeling someone's computer to a Dutch computer, with which that computer only gains access to content that is intended for a specific region.
American Netflix
Wonderful, this 'geographical blocking' of computers, but what if you still want to watch that American film on Hulu or download BBC documentary about your favorite subject? Fortunately VPN offers a solution for this. This 'Virtual Private Network' helps Internet users to move freely and anonymously on the web, partly because their IP address is masked and users can select servers in countries where they are not at that moment, without that server knowing who you are! Compare VPN to a secret tunnel that you build through the internet: a server in the US only sees that someone wants access to a website, but not who that is and where it comes from.
Watch film without restriction
For reaching that one Hulu movie, a VPN user can select a server in Dallas (or one in the Netherlands that contacts the server in Dallas via Smart DNS), and log in from there to the American Netflix. The Hulu computers then see a signal coming in with an American IP address (created by the server) and think: hey, an American user. Then you are free to log in with a valid account and stream the movie of your choice without restrictions.