Netflix, Inc. (NFLX) Takes Content Cues From Piracy Sites

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Netflix, Inc. (NASDAQ:NFLX) takes content programming cues from piracy sites, said Netflix Vice President of Content Acquisition in Europe Kelly Merryman, after Netflix started service in the Netherlands. The company claims that this is an attempt to curb piracy, reports Stephen Musil for CNET.

Netflix, Inc. (NFLX) Takes Content Cues From Piracy Sites

“With the purchase of series, we look at what does well on piracy sites,” said Merryman. She specifically mentioned that the decision to carry Prison Break was influenced by online piracy. “Prison Break is exceptionally popular on piracy sites,” she said.

Netflix is so much easier than torrenting: Hastings

Netflix, Inc. (NASDAQ:NFLX) CEO Reed Hastings said the company wants to be an alternative to piracy, which is undoubtedly true, just as Pepsi wants to be an alternative to Coke. “Netflix is so much easier than torrenting,” said Hastings. “You don’t have to deal with files, you don’t have to download them and move them around. You just click and watch.”

The relationship between online piracy and legal content is controversial, and demonization often clouds debate, but it’s good to see executives at a content company realize that their best long-term strategy is to provide a superior service that people are willing to pay for. Apple’s iTunes Store, as just one example, has been hugely profitable even though more or less the entire library can be had for free. People don’t have to pay for music, but they are willing to pay reasonable fees for ease-of-use and consistent sound quality. There’s no reason to think it would be any different with TVs and movies.

Netflix doesn’t have the same catalog depth as iTunes

Unfortunately, Netflix, Inc. (NASDAQ:NFLX) doesn’t have the same catalog depth as iTunes, so the analogy breaks down somewhat. Earlier this year, Netflix lost more than a thousand titles, and licensing issues could cause it to lose more in the future. The idea that Netflix wasn’t necessarily going to pick up a critically acclaimed series like Prison Break until it became popular on torrenting sites would be like Apple waiting to see how much club play an album gets before offering it for sale.

If the only value-added that Netflix, Inc. (NASDAQ:NFLX) can really offer is that you don’t have to download a file, then they’ve set their sights too low and are unlikely to gain much ground with young people, but at least they are pursuing customers with improved service instead of legal threats.

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