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How is Netflix contributing to the war on Piracy?

Posted by Laura Urquizu on Friday, Jan 27, 2017

On-demand video services have experienced enormous success, thanks to their recognition of changing customer needs; however, has this change made audiences more open to illegally pirating movies?Howisnetflixcontributingtopiracy.jpg

 Netflix now has almost 100 million subscribers, and has taken digital consumers by storm, one coined sexual innuendo at a time. But is it possible that the platform is hurting the movie industry more than benefiting it? DVD sales are indeed plummeting with its rise, and thanks to the very existence of Netflix facilitating high expectations towards on-demand movies and TV shows, illegal services are setting high competition. Netflix’s catalogue, whilst large, cannot hope to compete with illegal streaming platforms such as Popcorn Time. So what is Netflix doing to support the war on piracy?

To an unpopular result, Netflix has cracked down on location-blocking VPN users, arguably a step in the direction of total VPN ban. The move was not only unpopular for its compromise on internet security but also for consumers who use VPNs to ‘border-hop’ and watch material not available in their own country, primarily Netflix original productions. Netflix successfully predicted the knock-on increase of original content being pirated, and responded with strict monitoring that resulted in hundreds of takedown requests submitted to Google.

 

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But digital pirates are increasingly finding ways to exploit loopholes, and leaks of 4K movies and TV shows - ripped directly off Netflix - have surfaced, affecting Netflix originals and making use of the ultra-resolution. On-demand original movies and TV shows have surged in popularity, but in addition to disputes amongst filmmakers regarding the fairness of these deals, it’s possible that original Netflix content is leading to an increase in piracy thanks to the divisions created against other legal streaming services. Just as music exclusive to a streaming platform has escalated illegal downloads amongst members of other platforms, competition between Netflix and Amazon Video originals serves illegal streaming services such as Popcorn Time the upper hand.

Governments are taking steps to support legal streaming services such as Netflix, with the UK government this month unveiling an initiative to alert account holders of major ISPs if their account is being used for pirating. The scheme aims to educate and push legal alternatives to piracy, suggesting a potential increase in Netflix and Amazon Video subscriptions. However, the move has been criticised, with piracy experts anticipating a ‘minimal’ effect, as the alerts do not have any legal ramifications. Of course prosecuting on individual cases is difficult and costly, but without any real incentive it seems unlikely that consumers will change their behaviours. In addition to this, the initiative is solely concerned with monitoring P2P distribution networks, so users of illegal streaming sites or more complex piracy methods remain undetected.

 

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Indeed software such as Kodi is becoming increasingly misused, and its usability and high-resolution streams provide a real threat to streaming platforms such as Netflix. Kodi have made use of a legal loophole, whereby the software can be loaded with add-ons that access pirated content without itself breaching copyright law. Google searches for ‘Kodi’ have spiked over the last 12 months, indicating a changing demand in piracy possibly as a response to successful models of subscription streaming services.

The threat posed by piracy is ever-growing, as pirates are increasingly exploiting loopholes and adapting to implemented efforts in real time. It is clear that the media industry, despite its efforts, needs to do more to redefine its approach to tackling piracy, regaining the upper hand through new strategies. Whilst Netflix has made a great impact on the war against piracy, unprecedented knock-on effects have meant that they have facilitated a means to pirate content as well as creating a demand to do so. Its growing younger customer base supports the belief of many industry professionals that piracy is ultimately driven by the attitudes of younger people towards on-demand media. It is evident that despite government involvement, piracy is continuing to evolve with each new legal challenge, and will only slow when there is a cultural shift away from pirating content. 

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About the author

Laura Urquizu

Post Written by Laura Urquizu

Red Points' CEO Laura Urquizu has over 20 years experience as an executive and board director in banking, venture capital and startups. She has worked with companies like Arthur Andersen, Caja Navarra, Corporación CAN and Inspirit. Laura is a respected expert in the startup field and innovation-based businesses.