Netflix Uses Piracy Sites to Determine Which Shows to Buy — It’s Not as Crazy as You Think

/ Sep 15, 2013

netflix netherlands

Before you settle in to watch “Breaking Bad,” or Niners/Seahawks, or “The Newsroom” season finale, or Mariano Rivera’s last game at Fenway, tonight — seriously, it is a great day for watching TV — here is something interesting you might have missed about a company that is either hurting or helping the TV industry, depending on which TV network you ask.

In an interview with Dutch website Tweakers, Netflix’s VP of content acquisition Kelly Merryman said that Netflix determines which shows and movies to buy at least in part by looking at what is being heavily downloaded on BitTorrent networks and other piracy sites. “With the purchase of series, we look at what does well on piracy sites,” Merryman is quoted as saying to Tweakers by TorrentFreak.

It’s an eye-opening statement for sure, especially considering how most comments from the TV industry (which, yes, Netflix is a part of) about BitTorrent and piracy usually involves some sort of scorched-earth, burn-them-all-to-the-ground, policy measure. Here, Merryman is openly acknowledging the value of such sites to her company, which, remember, is still primarily a hub for people to watch and catch up on TV shows that actually air on TV.

In other words, it shouldn’t be too surprising that Netflix is resourceful enough to use services like BitTorrent as part of its acquisitions strategy. The idea is pretty obvious if you go through it piece by piece:

  1. Content licensing fees are getting higher every day
  2. Other companies are launching competitive streaming services
  3. Sometimes this means Netflix needs to offer shows on an exclusive basis, which raise fees even more
  4. Therefore, Netflix has to be careful about which shows it decides to license, especially if it’s on an exclusive basis
  5. People who download shows from piracy sites do so because they love those shows and are unable to watch them on TV
  6. If a lot of people are downloading a particular show in a particular region, it’s safe to say there is a strong market for that show in that region
  7. So if Netflix is able to offer that show, as well as a lot of other shows, all at a relatively low price, well, we’ve now arrived at the Netflix business model

Again, it feels very obvious if you think about it for longer than two seconds (which I just did). With Netflix’s recent launch in the Netherlands, Merryman said she saw that the old Fox show, “Prison Break,” is really popular in the country. Therefore, Netflix has acquired the rights to stream the show so the Dutch can watch it in a legally permissible way.

What would make this even more interesting is if Netflix starts to use a similar strategy to determine which shows it greenlights as new original programming. Netflix content chief Ted Sarandos has said before how Netflix’s decision to pick up “House of Cards” was relatively easy because the company had data that indicated its audience would watch a political drama.

What if the company used external data from, yes, piracy sites, along with its own internal data to inform its original content strategy? Wouldn’t these shows be more likely to be a hit with its viewers? Wouldn’t it accelerate the number of people who choose to sign up for the streaming service? Once again, it doesn’t sound that crazy, right?

Tags: , , , , , ,


Amazon Logo

Amazon Greenlights Three Comedy Pilots as Series

 
cartoon-network-app

How the Cartoon Network Combined the Best of VOD and Linear TV...

 
jukin-media-ethos

Jukin Media Goes Viral for Brands with Ethos Division Launch

 
Streamy Awards

Streamy Awards Trade In VH1 for YouTube, Again

 
Industry Tickets Selling Fast!
Click above to lock in your registration for VidCon 2015!
 
zefr-alignment-report

Matching Ads to Videos Not So Simple, According to Zefr’s...

 
shomi

Plug Pulled on Canadian SVOD Service Shomi

 
Twitter

What’s Trending on the Twitter Sale

 
Machinima Logo

Machinima Teams with SiriusXM for Daily Esports Radio Show

 
Hearst

AwesomenessTV, Vice, Complex to Power New HearstLive...

 
dirty-30-hannah-hart-mamrie-hart-grace-helbig

VIDEO: ‘Dirty 30’ Confessions with Stars Hart,...

 
facebook-thumbs-down

Facebook Says It’s Sorry It Vastly Overestimated Video...

 
craig-piligian-pilgrim-media-group

Pilgrim Media Group CEO Craig Piligian (‘The...

 
youtube-heroes-for-change

Heroes or Rats?: YouTube Unveils New Program for Creators Who...

 
Vessel says it's doing well in its first month

Why Verizon is Pursuing Vessel, the...

 
jared-feldman-and-sam-hui-ph-d-at-the-2014-canvs-launch

How Canvs Media is Harvesting Emotional Insights on YouTube,...

 
marlon-wayans

Marlon Wayans Getting ‘Naked’ for Netflix with Regina Hall

 
huffpost-ryot-aol

HuffPost RYOT Launching Virtual Reality Comedy Series and News...

 
youtube-vote-irl

YouTube Launches #voteIRL Campaign Targeting Digital-First Generation

 
tyler-oakley-camp17

How Top YouTubers (incl. Tyler Oakley & Meghan Rienks)...

 
charlie-sheen-anger-management

Charlie Sheen to Star in Crackle Feature ‘Mad Families’

 
filmbuff_videoink_300x250

Gunpowder & Sky Buys Distributor FilmBuff As Vision for...

 
toy-freaks-youtube

Toy Freaks Top Viewed YouTube Channel in August According to...

 
jeffrey-tambor-transparent-amazon

Emmy Wrap-Up 2016: Jeffrey Tambor (‘Transparent’)...

 
Twitter

Twitter Scores 2.1 Million Viewers for Thursday Night Footall Kickoff

 
youtube-sad-face-error

Vloggers Not Unique Snowflakes: 90 Million Flag YouTube Videos...

 
Mode Media

‘Billion Dollar Startup’ Mode Media Shuts Down

 
raised-firsts-branded-tv

Who Is Winning The Marketing Revolution And Why?

 
shes-gotta-have-it

Netflix Orders ‘She’s Gotta Have It’ Series...

 
swedish-dicks-peter-stormare-keanue-reeves-viaplay

What Is ‘Swedish Dicks’ and Who Is Selling It?

 
seamlessly-she-monica-potter-aol-partner-studio-gmc-acadia

How GMC is Using the AOL Series ‘Seamlessly She’...

 
Netflix_new

Liberty Global to Put Netflix on Set-Top Boxes in 30 Countries

 
vincent-cacace-vertebrae

Getting to the Spine of VR’s Monetization Challenges with...

 
meredith_brandfront_videoink_300x250

Meredith Hosted Its Own “Front” Stacked with 20 New Series

 
complex-networks-hearst-verizon

Verizon and Hearst Move RatedRed.com and Seriously.TV Under...

 
Twitter

Twitter Launches Live Streaming Apps for Amazon Fire, Apple TV...

 
YouTube Community

YouTube Fights Back Against Social Media Rivals with Community Feature

 
Casual Hulu

Vimeo Opening Television Store with Lionsgate Content, Launching...

 
A Perfect Day in LA Tastemade Jaunt VR Virtual Reality

From Donuts to Malibu, Tastemade and Jaunt Get Immersive in...

 
Defy Media

Defy Media Close $70 Million Series B Funding Round

 
YouTube Space LA Halloween Set 2016

YouTube Spaces Team with Jason Blum (‘The Purge’)...