Illegal Downloaders Are Helping Netflix Do Better Business

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Illegal downloaders might be a nightmare to entertainment companies everywhere, but Neflix (NASDAQ:NFLX) is now reporting details about how its company actually employs their services to help it determine which TV shows and movies it should provide.

According to Forbes, tech website Tweakers recently interviewed Netflix’s vice president of content acquisition, Kelly Merryman, and uncovered interesting details about how her company takes advantage of the host of illegal downloaders who visit piracy websites daily. Merryman said Netflix purposely targets the TV series that do well on piracy sites and then does what it can to offer the show on the company’s own service.

The VP highlighted the case of popular program “Prison Break” in her interview and used it as an example of a show that has stood out as a highly pirated series. She explains that Netflix was able to recognize this by looking at illegal sites’ histories, and the streaming site now offers it in The Netherlands, a country where the show is especially popular, for the first time.

The debut of “Prison Break” on Dutch Netflix highlights the company’s assumption that if so many consumers are willing to take the time and energy to illegally download the series, they will all also consider handing over the 7.99 euros per month in order to simply get “Prison Break” with only the click of a button.

And as it turns out, Netflix knows what it is talking about. According to Forbes, thanks to the company’s strategizing, a recent report released by Norwegian market researcher Ipsos MMI shows that the introduction of Netflix and Spotify in Norway has dramatically affected the region’s levels of piracy. There, only 65 million illegal movie downloads occurred in 2012 compared to in 2008, when 125 million were registered. As it turns out, CEO Reed Hastings’s assertion that illegal downloads are at least cut in half when Netflix comes to town is surprisingly accurate.

But unfortunately for the California-based media company, it’s not as simple as merely offering to users the top shows they want to watch. Netflix has fine lines to walk with its strict licensing, and in many countries, it’s at the mercy of competitors who have exclusive rights. Still, it is important for consumers to understand that they do have an influence on what shows Netlix chooses to provide (if it can), and that such power is likely here to stay.

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