Sometimes in business you have to cozy up to the enemy in order to succeed. In this instance, it’s a case of a massive online legitimate video distribution site keeping close tabs on its illegal competitors to best serve its own interests. What am I getting at here? Perhaps the largest and most successful streaming video service on the planet, Netflix, monitors BitTorrent and other piracy sites so they know what shows to purchase.
Just think for a moment about marketing strategies. You have a service that you know can be provided to a lot of people, but for it to succeed you need to deliver only the best content. Why waste your time and money filling your catalogue with things that people aren’t interested in? This is exactly the problem that Netflix faced. They have a service that is well known, but in order for it to be most profitable they have to put the majority of their resources and money in the right direction. How much money would the company earn if they spent millions of dollars every month purchasing movies and shows that nobody wants to watch? It would be a lot, and lead to a financial disaster. But the people running Netflix are a clever bunch and worked something out to help the company succeed. All they had to do was watch the pirates.
Online piracy has been a problem for the entertainment industry for nearly two decades now. Anything that can be digitized faces the risk of being illegally copied and downloaded. Regardless of your own personal standing on the issue, it remains an illegal activity and actually does cost those who produce and distribute the content we enjoy a lot of money. But instead of stamping their feet like a three year old pitching a fit, Netflix decided to sit back and watch the pirates at work. Not to turn them in, but to see what they wanted to watch.
Herein lies the biggest problem with online piracy today. Most people, not all, but most, are happy to pay for the content that is made, be it movies, television shows or movies. But what everyone wants is for that same content to be made readily available at a fair and reasonable price. Why should the consumer be expected to pay $5 today for something that was shown last night for free? That’s the problem that authorities and the industry need to get through their thick heads. If what they make is affordable, people will be happy to pay for the privilege to use it. Netflix, for their part, have come part of the way.
To best decide what shows to buy for their subscribers, Netflix monitors BitTorrent and other sites that are used for online piracy. These kind of sites are extremely popular, thanks to Hollywood greed, and it is generally the most popular shows and movies that are pirated the most. By watching these sites Netflix can determine what shows to get for their users, and at the same time encourage more people to subscribe to their very affordable subscription service. But it’s not foolproof, as any fan of Game of Thrones will know. So how do we know this for sure?
In 2013 when Netflix was released in the Netherlands they had to look at supplying the local market with content they were interested in watching. By Netflix monitoring BitTorrent for what was locally popular it allowed them to acquire what the local populace wanted.
This week Netflix rolled out its service in the Netherlands and the company’s Vice President of Content Acquisition, Kelly Merryman, says that their offering is partly based on what shows do well on BitTorrent networks and other pirate sites.
“With the purchase of series, we look at what does well on piracy sites,” Merryman told Tweakers.
One of the shows that Netflix acquired the rights to in the Netherlands is Prison Break, since it is heavily pirated locally. “Prison Break is exceptionally popular on piracy sites,” Vice ~President of Content Acquisition, Kelly Merryman
Even the founder of Netflix, Reed Hastings, acknowledges the importance torrent sites has on his business. People downloading shows and movies for free just drives demand for the content on Netflix, which improves profit.
SOURCES
- How Clever, Netflix Monitors BitTorrent To Purchase Shows
- Netflix uses pirated sites to determine what shows to buy
