Netflix, the video streaming service, looks at what’s popular on Internet piracy sites to determine what shows it should buy. Ironically, the service, which has long positioned itself as an easier and legal alternative to piracy sites, examines its shady competitors to decide on its own content-development strategy. A Netflix exec revealed the company’s strategy ahead of its launch in the Netherlands last week.
“When purchasing series, we look at what does well on piracy sites,” Netflix VP of content acquisition Kelly Merryman said in an interview with Dutch tech site Tweakers, Variety reported. For instance, Netflix acquired the rights to “Prison Break” specifically because it has been pirated so much in the Netherlands. Therefore, Netflix is betting that people there will fork over 7.99 euro per month (about $10.59 U.S.) to stream “Prison Break”, which aired in the U.S. on Fox, legally.
The launch of Netflix in the Netherlands marks the 41st country that now has the video streaming service. Netflix execs have previously claimed that piracy rates drop after their service becomes available. CEO Reed Hastings claimed that BitTorrent usage in Canada dropped 50 percent following the launch of Netflix in the country.
“Netflix is so much easier than (using BitTorrent),” Hastings said in a separate interview with Tweakers, per Variety. “You don’t have to deal with files, you don’t have to download them and move them around. You just click and watch.”
Forbes reported that there is some evidence that supports Netflix’s claim that piracy levels decline after its streaming service is introduced. A recent report from Norwegian market researcher Ipsos MMI found that the launch of Netflix and Spotify in Norway had a significant impact on piracy rates. In 2012, the researchers found there are only around 65 million illegal movie downloads and 55 million TV downloads, compared with 125 million and 135 million, respectively, in 2008.
The Huffington Post noted that in May, Netflix’s Chief Content Officer Ted Sarandos said in an interview that when Netflix launches in a new place, “Bittorrent traffic drops as Netflix traffic grows.” The reason for this is he believes that “people are honest” and value a positive, easy experience, which they get from Netflix, not pirating sites.
As Netflix is well aware, the popularity of a show on pirate sites speaks to the show’s success. But Netflix execs are not the only ones tracking what’s popular on illegal downloading sites. Time Warner CEO Jeff Bewkes recently said that he was pleased HBO’s “Game of Thrones” was the most pirated show of 2012, per HuffPost. “That’s better than an Emmy,” said Bewkes, who believes that in time more piracy will lead to more paid subscribers.