September 19, 2013

How Piracy Affects What You See on Netflix

Media piracy has been a thorny issue ever since the turn of the century. The Information Age giving rise to P2P file sharing services like Napster, LimeWire, and BitTorrent, and gave users instant access to their favorite music and other media for free, challenging the 1998 DMCA. The entertainment industry seems to have largely taken a solid position against piracy, but what if piracy information is used to choose the programming of a paid service? Netflix recently shared that they take this data into account in their content development strategy, adding yet another dimension in the anti/pro piracy debate.

Netflix VP of content acquisition Kelly Merryman spoke with Tweakers, a Netherlandish technology website, and said, "When purchasing series, we look at what does well on piracy sites." She gives the example of Prison Break -- how its popularity on piracy sites in the Dutch market lead to Netflix's decision to acquire the rights to it.

Whether you're for or against piracy, this is an interesting move by Netflix. While millions of people around the world are getting their music, movies, TV shows, and video games for free through torrent sites, Netflix is tapping into this information -- essentially getting low to no-cost market research to help them determine which shows their customers are interested in watching.

However, is it ethical for a company to use information -- information that wouldn't exist if people weren't breaking laws -- in order to bolster sales, or is it just another way to measure demand? (Granted, I'm sure that's not the only data they're looking at.) Will this move actually make Netflix more appealing to P2P users, causing a grand media consumption exodus?

I suppose we'd have to consider this as well: Who's going to pay for something they can get for free with only a distant chance of retribution? Well, maybe people won't pay for the content necessarily, but maybe they'll pay for ease of use -- and Netflix knows it.

Netflix CEO Reed Hastings also spoke with Tweakers in a video interview, and when asked if he thinks the Dutch consumers will switch to legal Netflix content, Hastings replies:

Well, certainly there's some torrenting that goes on, and that's true around the world. But, some of that just creates the demand. Netflix is so much easier than torrenting, because you don't have to deal with files. You don't have to download them, and move them around. You just click and watch. Click and watch, and so it's so easy.

piracy

Hastings also mentions that ever since Netflix launched in Canada 3 years ago, BitTorrent is down 50%, possibly indicating that the free P2P platforms are being foregone for the easy-to-use Netflix platform. But, is Netflix going to be able to gather the massive file sharing community and turn its users into Instant Queue movie hoarders? How many will jump the pirate ship? Will they use both?

Check out the video interview with Reed Hastings on Tweakers' site. Part of it is Dutch, but the interview is in English.

What do you think about Netflix's use of piracy information? Does piracy actually help legal concerns like Netflix? Do you think Netflix's ease of use will appeal to P2P users and decrease pirating? Let us know in the comments.

[Skull and crossbones image by Flickr user Will Lion]

Link: Netflix baseert aanbod deels op populariteit video's op piraterijsites --  Tweakers

[via The Verge]

Your Comment

38 Comments

I think this is a great idea. You can't stop people from pirating movies and TV shows. It's a fact of the digital age. But when people see that the shows they would normally pirate can be quickly streamed on an $8/mo service w/o popups, ads, the risk of viruses, in decent quality and without the hassle then they're more likely to switch. Then at least the content creators are getting SOMETHING from them instead of absolutely nothing.

September 19, 2013 at 4:22PM, Edited September 4, 11:21AM

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Jared

Most people I know only torrent what they don't have access to on Netflix and/or Hulu (like GoT). I actually do not know anyone who only use torrents, it's usually a fallback.

September 19, 2013 at 4:54PM, Edited September 4, 11:21AM

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Why can't just look at the sales charts/legal downloads, local box office numbers, ratings in general, the social site following, etc.? The illegal downloaders have a very specific demographic, which is not representative of their general target audience, which is essentially everybody.

September 19, 2013 at 5:25PM, Edited September 4, 11:21AM

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DLD

?

September 19, 2013 at 6:54PM, Edited September 4, 11:21AM

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alex

No where does it say that they exclusively look at torrenting.... they likely take it as one of many sources of information about what would attract viewers.

September 19, 2013 at 8:30PM, Edited September 4, 11:21AM

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The torret sites have a larger pool of content then the other top charts. Also no one pays or try's to get their movies on thy torrent sites. So what's popular there is a more honest score for what people are actually watching.

September 19, 2013 at 10:27PM, Edited September 4, 11:21AM

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Dustatron

@DLD

This is why you're not the head of a successful company like Netflix. You think inside a box.

You have no idea what "demographic" frequents torrent sites. How would you know such a thing? And not all torrents are illegal. Some artists use it to distribute their own work. The world is a big and diverse place, my friend.

September 21, 2013 at 11:13AM, Edited September 4, 11:21AM

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Ron I

Streaming companies do their thing, they adapt. Offer cheap, fast and easy options and you'll have your share.

September 19, 2013 at 5:28PM, Edited September 4, 11:21AM

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Natt

Someone once said that piracy shouldn't be seen as the enemy, but as the competition. It will never go away, so find ways to make a better offer. And at the end of the day, competition is good for us - the customer.

September 19, 2013 at 5:32PM, Edited September 4, 11:21AM

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Wise ol' Steve Jobs

September 19, 2013 at 11:46PM, Edited September 4, 11:21AM

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avatar
V Renée
Nights & Weekends Editor
Writer/Director

The problem is that they don't compete with you with their own products but with your own products.

September 20, 2013 at 12:54PM, Edited September 4, 11:21AM

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Koseng

You're missing the whole point.

September 21, 2013 at 11:14AM, Edited September 4, 11:21AM

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Ron I

You know what this means? We may be getting Game of Thrones on Netflix in the near future.

September 19, 2013 at 5:44PM, Edited September 4, 11:21AM

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Peter P.

Doubt it. It's an HBO property and will most likely not make it on there.

September 19, 2013 at 6:25PM, Edited September 4, 11:21AM

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Jorge Cayon

The other market indi (and all for that matter) producers need to take note of is the "early adopter" people that "can't wait for a product or service."

The video game industry does this well - GTA will be pirated like crazy in the coming months, but after $800 million dollars sold on DAY ONE, it is clear hundreds of thousands of people didn't want to wait.

:)

September 19, 2013 at 5:54PM, Edited September 4, 11:21AM

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Lisa

The video game industry has an enormous advantage over film/TV: it has no legacy of artificially staggered release windows controlled by middlemen. Believe it or not all producers and studios would love to release all their product globally simultaneously, especially within languages. Some have even tried it, although they got their hands chewed off by distributors and stopped pretty quickly.
While most video games roll out somewhat staggered (GTA5 not out yet in Japan or Brazil for example) there is nowhere near the economic barriers for them to do international day/date.
Perhaps in about a decades time the overwhelming success of platforms like Netflix/Hulu will break that dam, but unlikely soon, particularly in the US.

September 19, 2013 at 6:03PM, Edited September 4, 11:21AM

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marklondon

This is an old tactic - the music business has been doing this since the days of 'home taping'.
If I worked at a TV network I'd pay attention too - the shows that aren't 1st page on a torrent site are trending too old, or are just unpopular. Much more accurate for certain shows than Neilsen.
Very sensible by Netflix: give the people what they want, and you'll make money.

September 19, 2013 at 6:06PM, Edited September 4, 11:21AM

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marklondon

Netflix actually dumped a bunch of shows that were expensive to own but purportedly not popular with their clientele.
.
PS. It's verrrrrry unlikely that the Game of Thrones ends up on a streamer beside HBO, that has its own streaming service with HBO2Go. (of course, type in GoT into a search engine and the illegal sites pop up in droves)

September 19, 2013 at 7:17PM, Edited September 4, 11:21AM

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DLD

Great idea!

September 19, 2013 at 6:22PM, Edited September 4, 11:21AM

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Fernando

For everyone not living in America, like me in Australia who can't get netflix or US apple itunes (legally anyway...) Piracy is often the only way to get access numerous films.

I know plenty of people that download films, that if netflix was an option would sign up to and be happy watching films on it.

September 19, 2013 at 8:45PM, Edited September 4, 11:21AM

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zeb

+1

September 19, 2013 at 11:56PM, Edited September 4, 11:21AM

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There are ways to get netflix in countries where the service is not available...

September 20, 2013 at 3:44AM, Edited September 4, 11:21AM

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Nimell

+1

September 21, 2013 at 6:01AM, Edited September 4, 11:21AM

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palisady

http://vimeo.com/8040182

A Remix Manifesto: the last word on Copyright and "PIRACY"...? Have to watch this

September 20, 2013 at 2:37AM, Edited September 4, 11:21AM

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Frank

This is hardly surprising.

Competing with piracy has been demonstrated before, even in Hollywood. In China, legitimate DVDs are priced rock bottom in order to compete with the vast bootleg DVD market, because honestly, how else would you sell it?

September 20, 2013 at 9:59AM, Edited September 4, 11:21AM

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Using data on piracy is no different than using data on other criminal activity - it's data. To say a company 'shouldn't use data from illegal activities' is like saying the police 'shouldn't use data from other crimes.' Ridiculous. Good for Netflix for being creative and focusing on their market and their customers.

September 20, 2013 at 12:01PM, Edited September 4, 11:21AM

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You only need one person to torrent a series then hand the file off to a friend who hands that file off to a friend and so on and so on... That is the sad state of piracy, people who have no moral problem watching files off swappable drives.
Here in South Africa from a quick survey from friends (we don't have Netflix) shows like House of Cards or up to date Breaking Bad are viewed within weeks of the US release from swapped hd's or DVD stores ( we still have those) renting pirated copies of pretty much every popular series.
US TV series have far eclipsed movie rentals in DVD stores revenue.

September 23, 2013 at 8:36AM, Edited September 4, 11:21AM

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Dan

Are you joking, who is using torents now? !? Majority is using several Rapidshare type os services just because torent is slow. Torents are so yester yesterday now.

September 23, 2013 at 10:19PM, Edited September 4, 11:21AM

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Nazdar

Like it or not, but downloaders spend more money for music then non-downloaders.

September 23, 2013 at 10:28PM, Edited September 4, 11:21AM

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Nazdar

The whole idea is to be free from commercial television and actually create your own tv night. The safety is in numbers. When Netflix starts pushing popular content taken from research within the 'illegal' market they are competing with websites like the pirate bay. That gives them not only more subscribers to their service, it also gives them popularity within the publishing world and the film companies. So, they are the smart ones actually
Iistening to consumers. And helping out the industry getting rid of illegal downloads. Sorry, but isn't that the oldest news since online copyright infringement started? The great news is that we no longer have to be bullied by commercial superstations that control your life since they control the adds. TV is as dead as a rock. Online is so alive, it's thrilling! And the industry we all love so much (creating moving images) is more alive than ever. So, Netflix go online and do your research. We are consumers in control and you're our big cousin to help us choose easy to control content that we like. What's negative about that scenario?

September 26, 2013 at 4:32PM, Edited September 4, 11:21AM

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ErnestB

A agree with the article and many of the comments here. I am happy to pay for my entertainment such as the movies I watch. Not just because it is legal, but because it supports the studios that make the movies that I love and I want them to make more.

But yes, as other above have mentioned, it is irritating that there are geographical restrictions on many services like Netflix. We can't get that service in Australia and there is no similar service for us. I actually spend a great deal of time trying to find some sort of video streaming or hiring service for movies that I can actually access. Oddly the best I have found is based in Russia so many of the credits and titles have been re-done in Russian, though the sound track is in English.

The point being, I think sometimes the industry its self has to take some of the responsibility for the amount of piracy that goes on as it is actually very very difficult to be able to watch the movies and TV shows you love if you live anywhere other than in the US. I think the industry should remember that it exists to serve us, its customers, the customers don't exist to serve them. I wish there was someone you could go to and say, look could you set up Netflix here please, or could you please let us watch the catch up episodes you are streaming on your web site (but only to the US). But there isn't, so piracy exists.

September 26, 2013 at 7:28PM, Edited September 4, 11:21AM

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Good News Haydn, Netflix is available in Oz, with a current total cost of $13 US a month without breaking any laws.

http://www.netflixaustralianow.com.au/

It's very easy to set up.
I know I sound like a bit of a spruiker but since I took it up we've pretty much abandoned Commercial TV, and Foxtel was always a rubbish option for the price.
Definitely worth checking out

September 27, 2013 at 12:14AM, Edited September 4, 11:21AM

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Mick

Scale of laziness:

1. Work for money to spend on entertainment.

2. If #1 is too hard, use software to download files for free, assuming musicians and filmmakers don't need money to create.

3. If #2 is too hard, pay Netflix and let them decide what you watch based upon what less lazy people are taking the time to pirate.

September 26, 2013 at 11:15PM, Edited September 4, 11:21AM

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Matt

I really wish the term "piracy" would stop being used to mean "copyright infringement".

It's simple, really. The word piracy has a specific meaning, that being (generally) to take someone else's property, by violent act or force, for the purpose of profit.

What people do when they share movies - whether or not you think it's ok - is certainly not using violence to take some thing away from some person, for personal profit. It is illegally making a copy of someone else's abstract work (a movie is not a 'thing' in the normal sense), and distributing it.

We have a phrase which has a specific meaning equaling that. It's called "copyright infringement".

I don't mean to be overly pedantic, but jeez. It is so transparent that the word "pirate" has been cooked up by the intellectual property folks to demonize anyone who shares content.

Share a copy of your favorite movie with a friend? PIRATE!
Have 10 friends over to watch a movie they haven't paid for? PIRATE!

Don't get me wrong. If someone is taking copyrighted material and making cheap copies and selling them, then by all means, call them a pirate. I'll even let the whole "by violent act or force" slide. They are doing it to make money and that is wrong. But am I a "pirate" because I play Star Wars on Halloween at my party and allow 30 people to watch it? Ignoring the fact that every person in the room paid to see it in the theater AT LEAST ONCE, and others paid many times over?

The establishment would say "Yes!"

I'm just asking for a little truth in advertising, if you will. If you are going to call someone a name, if you are going to label them with an epithet...Is it too much to ask for the word or phrase you use to be accurate?

Whenever I hear about someone's house being "robbed", I always ask the speaker..."do you mean burgled?", because robbery is something that a person does face-to-face, not sneaking around your house while you are at work. Both are wrong, but please, don't call burglars "robbers".

Similarly, don't call copyright infringers "Pirates". It is inaccurate at best, and at worst you are helping the MPAA and RIAA with their witch hunt, and spreading THEIR memes.

September 27, 2013 at 8:09AM, Edited September 4, 11:21AM

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Marcus

You are right "copyright infringement is not exactly piracy'' some day then somebody may ask for the Royalty for the songs being hummed in the bath room and so on.
The hight of such things was when few years ago some USA Corporate tried to Copyright/Register/Trade Mark foolishly the traditional use of Ginger,Lemon and Turmeric, Neem ,Tulsi etc in India.
The greed of the Governments,Corporate and Individual will keep inventing various methods of free and/or cheap use of the things people desire most unmindful of the legality

November 30, 2013 at 8:24AM, Edited September 4, 11:21AM

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Piracy sucks.
You know what sucks more? Ripping off the consumer, mainly in poor countries.

If I had the chance I would definitely but netflix in my country! I'm saying this with my friends for a few years. But I simply can't.
In a country, where the avrg wage is about $700 you can't expect people to buy dvd/br for $30! Even a visit to the cinema is a nightmare for a family.
Wages are low, prices are high as in countries where they have a 4x higher income.

Anyone still not getting the piracy issue in those countries?

September 28, 2013 at 5:40AM, Edited September 4, 11:21AM

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trilobite

Yes, it will definitely help the Legal Business to generate extra revenue, 2nd Piracy actually helps the Corporate getting free sample surveys marketing of the various products from the Pirates and hence deciding only the running and hit products only; lastly the chances of Illegal user moving to Legal Site are always greater as no body like to known as an illegal user in the long run.
There was Time in Hindi Music Industry when the So called Legal Copyright Holders/Mainly Hindi Film Producers Used to Request The Biggest Pirates "to put cheap cassettes and cds of their Film Music in their Network so that it can reach to the last village as the corporate Music Company burdened with Over Head and Costs of IPR, Marketing and Manufacturing,Distributions etc. were reeling under the physical organised piracy of the music.Spreading their Music through Pirates to boost the chance of Increasing the Box Office Revenue many fold as the songs were made to reach in almost every home.Hindi Films 1st step of marketing is the Songs promotion only

November 30, 2013 at 8:08AM, Edited September 4, 11:21AM

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This makes the point that some of us have been saying all along, make content available, at an affordable price and the copyright infringement issue disappears. I don't have to copy cd's because I can go to my Wal-mart and buy one for $5.00. It's not worth the effort to copy. The Issue now is movie content and the Big Studios still don't understand content and delivery....they are still using the 100 year old model. They fought each other on HDDVD vs BlueRay and drove that delivery method into oblivion. The Now is streaming, but instead of realizing the value of having the delivery media.......such as developing Universal Studio or MGM app for devices (get a nominal fee for app) and deliver advertising content.....They continue to sue, harass, and buy political enforcement of the people who are good at content delivery. Some companies such as netflix have seen this and started delivering their own content.....such as House of Cards, and Orange is the new Black. If the major companies don't get a clue it may be too little and too late.

February 28, 2014 at 1:13PM, Edited September 4, 11:45AM

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Ragnar Danneskjöld